Sisley seeks tenant for Grafton Street
Move may once more raise issue of rent levels on city centre thoroughfare
Sisley at 59 Grafton Street, Dublin, which has a retail area of 129sq m (1,389sq ft). photograph: alan betson
of having to pay significant financial compensation – known as a reverse premium – to attract a replacement tenant for its store near the top of Dublin’s Grafton Street.
Sisley is also planning to offload its shop in Dundrum Town Centre while sister company Benetton has indicated that it will be offering “substantial incentives” to traders willing to take over the lease of its store in Liffey Valley shopping centre.
London agent Harper Dennis Hobbs has announced on its internet site that the incentives to be offered for Grafton Street and Liffey Valley will depend on the strength of the incoming covenants. The landlords in both instances will obviously expect to secure tenants as financially secure as Sisley and Benetton.
The company’s decision to pull out of Grafton Street may well reopen the issue of rent levels in the city’s main shopping thoroughfare. Though many traders have had their rent cut by 50 per cent and more, some landlords have either refused to make concessions or granted only marginal reductions.
In Sisley’s case, the landlord, Irish Life, has apparently settled for an abated rent of €453,164 as against the full rent of €537,000 – a reduction of 19 per cent. On the opposite side of Grafton Street, Canada Life, which now trades here as Irish Life after taking over the company, has agreed to let a shop to Ecco Shoes for €210,000 after a long running dispute with the previous tenant (Korkys Shoes) which had been charged €445,000.
Two other institutions, Irish Property Unit Trust and Aviva, also dropped the rent on the former HMV store from €1.7 million to €865,000 in order to attract Massimo Dutti.
Sisley is understood to have paid key money of €382,000 for 59 Grafton Street in 2002 when it signed up to a 25-year lease which runs until 2027.
The original rent of €275,000 was increased to €537,000 during the 2007 boom – a figure that is difficult to justify for an understated shop with a ground floor retail area of 129sq m (1,389sq ft).
Unlike the Grafton Street unit where a reverse premium will obviously apply, Sisley is inviting offers for the shop in the Dundrum Town Centre, where there is a constant demand for outlets both from Irish and overseas traders.
The tenant is paying rent of €248,000 rather than the full rent of €295,000 for the 127sq m (1,373sq ft) shop on level two. The 25-year lease gives the tenant a break option in 2021.
Benetton’s London property agents said on their website that “substantial incentives are available, subject to covenant strength” in the case of the Liffey Valley shop.
The 195sq m (2,100sq ft) unit has an abated rent of €291,983 rather than the original rent of €346,000.
The lease does not expire until 2023 and the next rent review is due in 2016.