As Habitat prepares to move to College Green, the rent for its outlet on St Stephen's Green - to be occupied by UK fashion retailer Arcadia - will more than double. Jack Fagan reports
The rent of the Habitat store near the top of Dublin's Grafton Street is to rise from €698,000 to over €1.5 million per annum following the relocation of the company and its replacement by Arcadia, the UK retail fashion chain.
Arcadia is expected to use the high profile premises at 7 St Stephen's Green for two of its brands, Top Shop and Top Man, which are primarily aimed at young customers.
Habitat's decision to move from St Stephen's Green to the former Bank of Ireland
building linking College Green with Suffolk Street came just as it was facing a stiff rent review.
While Habitat was obviously concerned that Grafton Street rents have been rising by more than 100 per cent, the decision to move was made considerably easier when it accepted an offer of a ¤3 million premium for the lease of the St Stephen's Green premises from owners Salix, the Bank of Ireland staff pension fund.
It is by far the highest key money paid for a retail outlet in this country - a long way ahead of the €600,000 to €750,000 paid for some of the best buildings on Grafton Street.
The choice of Arcadia for the exceptionally fine St Stephen's Green premises - it has a floor area of 3,000 sqm(32,000 sq ft) on three levels - will come as a disappointment to local traders who had been hoping that it would go to either Zara or H&M, two of the undisputed leaders in the fashion world who will shortly be trading alongside each other on Henry Street.
Zara has already given Henry Street an important edge since it opened as part of the redeveloped Roches Stores. Although Zara and H&M, along with Next, apparently pitched for the St Stephen's Green building, the pension fund settled for Arcadia because of the substantial - though staggered - rent offered and the underlying strength of the group; its £9 billion sterling (around ¤11.65 billion) bid for Marks & Spencer last summer was turned down.
Arcadia was obviously anxious to put down a marker in the Grafton Street area after having failed to find accommodation in the upmarket Dundrum Town Centre, due to open next month. Arcadia already has two of its brands, Miss Selfridge and Wallis, trading along Grafton Street.
However, its management was obviously miffed by its failure to get representation in Dundrum but that only came about because developers Castlethorn set out from the start to bring in a strong mix of European and UK traders not generally found in other shopping centres. This obviously put Arcadia at a disadvantage because it already operates a range of stores in the Jervis Centre, Liffey Valley, Blanchardstown and Limerick as well as Grafton Street.
Meanwhile, Habitat will be paying a rent of around €1.2 million for the old bank building which will have a total floor area of 3,344 sqm (36,000 sq ft). There will be three levels of retail use at the Suffolk Street end, basement, ground and first floor, and mainly one level fronting on to College Green. White Glory, a consortium led by the owners of the Powerscourt Townhouse, which owns the former bank building, has set aside a separate 232.2 sq m (2,500 sq ft) retail unit fronting on to Suffolk Street and about 4,000 sq m (43,055 sq ft) of offices on the top floors.
White Glory paid around €22 million for the building which is composed of two distinctly different structures - the large 19th century double height banking hall fronting on to College Green and, on Suffolk Street, a 1960s building that has been enlarged. Jones Lang LaSalle has been representing Salix, Palmer McCormack is advising Habitat, DTZ Sherry FitzGerald is acting for Arcadia and Hamilton Osborne King is representing White Glory.
