Designer shops pay top rents in Liffey Valley shopping centre
The Liffey Valley Shopping Centre which opens for business on October 14th at Quarryvale in west Dublin will be the first motorway shopping centre in the Republic, the first large shopping complex without a foodstore and the first to attract top-of-the-range rents before it even opens.
The promoters have always claimed that their site is the most accessible in the greater Dublin area. It is located at the fulcrum of the M50 and the N4 Lucan-Galway road, two of the busiest highways in the country. The shopping centre will form the centrepiece of the 180-acre site, where a whole range of other commercial facilities are to be provided over the next few years, including multiplex cinemas, retail warehousing, offices, a hotel, leisure centre, motor mall and buildings for high tech industries.
Even before Liffey Valley opens its doors to the public, its promoters are already campaigning to be allowed to double the size of the shopping centre to 500,000 sq ft to give it a better tenant mix and to enable it to compete head-to-head with Blanchardstown Town Centre, a mere four or five miles away just off the M50. Five years ago, the former Dublin Co Council capped the scheme at 250,000 sq ft precisely for the same reason: it did not want it to draw business away from Blanchardstown. But with two big English institutions now running the show - General Accident, with 80 per cent of the equity, and the Duke of Westminster's company Grosvenor Estates with the remaining 20 per cent - pressure is being exerted on South Dublin County Council to scrap the original agreement and allow Quarryvale to be transformed into another mega out-of-town centre. The market economy takes no prisoners.
So confident were the owners of getting their way with the planners last summer that they proceeded to sell for £25 million an 11-acre site to Tesco for a stand-alone food and department store of about 80,000 sq ft.
All seemed to be going smoothly until the Minister for the Environment, Noel Dempsey, ruled that no further planning permissions would be granted for supermarkets over 32,000 sq ft until an expert committee had examined the whole issue. The Minister's intervention was a particularly severe blow to Tesco, which had planned a major outlet at the northern end of the M50 near Malahide as well as on the site in Liffey Valley.
Some experts in the industry wondered whether the action was as much a reprimand to the UK multiple for its handling of the issue of stocking Irish goods on its shelves, as it was concern over the thorny question of allowing out-of-town superstores to drain trade from the city centre. There appears to be no rush to get the study under way, and for that reason we are unlikely to see much development activity until well into the new millennium.
As things stand, no one knows precisely what affect Liffey Valley will have on Blanchardstown or The Square in Tallaght, nor for that matter, on Dublin city centre, which will now have to contend with three major out-of-town retail centres. The absence of a food store in Liffey Valley may not be all that significant, because if the UK is anything to go by, it is perfectly possible to have a highly successful shopping centre without a supermarket. From the start, Liffey Valley concentrated on attracting designer names. The centre is aimed at the middle to upper end of the market. It will be a place to preen and be seen. Its marketing brochures claim that, compared to the national average, more than 45 percent of its shoppers in the catchment area will be either from a professional or clerical background. Furthermore, those living in the catchment have a much higher ownership of cars than the national averge. If that turns out to be true, then the traders will hardly worry about having to pay the highest out-of-town rents in the Dublin area - £130 to £140 per sq ft for Zone A compared to £80 to £90 in Blanchardstown. Not surprisingly, GA and Grosvenor can expect an annual rent roll of almost £9 million from the centre, even though Marks & Spencer and C & A have bought their stores outright.
When the concept of a shopping centre on the Quarryvale site first emerged, the experts said that the developers would have to pull off something special to make it work so close was it to both Blanchardstown and The Square. The turning point came when the original promoter, Owen O'Callaghan of O'Callaghan Properties in Cork, agreed terms with Marks & Spencer for its first out-of-town store. This led to inquiries from multiples wanting to trade alongside the UK giant.
By the time Boots and C&A had also come aboard, letting agents Hamilton Osborne King had effectively decided that the remaining shops would be let by invitation rather than by open competition. With space strictly limited, they were in a position to set the highest rents for a new shopping centre.
If a second phase of 250,000 sq ft is eventually allowed to go ahead, won't this mean that the first shops will turn out to be over-rented? Aidan O'Hogan, managing director of Hamilton Osborne King, is adamant that this won't happen. He says that the existing rents may, on the face of it, appear to be high relative to rents in Blanchardstown.
But he points out that there has been a five-year gap between the time the Blanchardstown rents were quoted, and the opening date of Liffey Valley, a period in which there has been a dramatic upsurge in the volume of retail sales, with rents moving ahead correspondingly. "The rents are still only equivalent to about 70 per cent of Grafton Street levels."
He said the experience in the UK had been that the rents in these centres have grown to match rents in the high streets, and Liffey Valley was likely to follow this trend. The layout of the centre is based on a simple but well-tried formula of having two long malls running in opposite directions from a central atrium. Marks & Spencer and Boots are at opposite ends, with frontages on to smaller circular atriums. Both are very large stores, M&S with 100,000 sq ft, Boots with 25,000 sq ft; C&A will have 22,000 sq ft. The malls are big and bright with excellent dimensions and overhead skylights to maximise daylight. Liffey Valley will rely heavily on its food court to pull in shoppers. The facility is located at first floor level overlooking the central atrium: there will be six different food operators (from McDonalds to BBs Restaurant) with communal seating for 450 people to dine together.
AT ONE end of the long malls there will be three "real" restaurants, which have not yet been let, opposite the cinema complex. This will not open until next August.
The owners of Liffey Valley plan to have a "soft" opening next month in the expectation that at least 70 per cent of the shops will be fitted out in time. A high profile official opening would have led to chaos on both the M50 and the N4. Even as things stand, the centre will undoubtedly make traffic conditions on the M50 considerably worse than at present.