BANK OF Ireland Investment Managers is to be given the rare opportunity of combining two and possibly three shops on Dublin's Grafton Street to create a large single unit which should appeal to fashion multiples.
Kieron Diamond of agent Knight Frank is seeking a premium of €350,000 for the leasehold interests in 34 and 34a which stand at the corner of Grafton Street and South Anne Street.
The shops trade as Grafton Crafts, previously as the Guinness shop. The planners have approved a plan to combine the two units to create a ground floor area of 70sq m (753sq ft) and a total basement area of 105sq m (1,130sq ft).
While Knight Frank is offering the leases to traders looking for a strong pitch on the high street, the likelihood is that they will be bought in by the investment arm of the Bank of Ireland because both belong to them. And, what's more, the bank could also take in the adjoining shop which it also owns and which is rented by O'Briens sandwich bar. It has a floor area of 33.5sq m (361sq ft), which would bring the overall ground floor area of the three units to more than 100sq m (1,076sq ft).
Natalie Brennan of CB Richard Ellis, who advises O'Briens, says they have had several unsolicited approaches from traders to buy the lease in recent weeks but she had no specific instruction to seek offers.
The Grafton Crafts shops produce a combined rent of €415,000 per annum and are subject to review again in 2009 and 2011. The bank earns a further rent of €193,000 from O'Brien's.
With the major multiple traders now looking for larger floor plates than those generally available on Grafton Street, the bank may well be prompted to redevelop its entire block of properties at the junction of South Anne Street and Grafton Street given the obvious opportunity to create additional retail space on the upper and lower floors. The current use of the overhead floors as offices is no longer viable in one of the world's most expensive shopping precincts.
Whether the high value Zone A rents can continue into the future must seem extremely doubtful given the poor quality and layout of many of the stores and the fall off in consumer spending.
The move to larger stores - planned mainly for the Henry Street area - could further undermine Grafton Street unless there is a rapid change in store formats.
Later this month, the American fashion multiple Tommy Hilfiger is due to open a major outlet on the site of the former Grafton Arcade and next door to Marks Spencer.
The facility was apparently first offered to the New York jewellers Tiffanys but they turned it down because of the high rent of around €1.68 million. Hilfiger will trade out of 696sq m (7,500sq ft) over seven floors.
