Cut-price fashion retailer TK Maxx has agreed letting terms for a new store in Waterford city after being forced to close its two-year-old outlet in Butlerstown retail warehouse park.

The multiple trader is to pay 5 per cent of turnover rather than a standard rent for a shop of 1,718 sq m (18,500 sq ft) in a mixed-use development at Railway Square on the edge of the city.

Last March, An Bord Pleanala ruled that the fashion retailer was operating in contravention of the planning regulations that only allowed bulky goods to be sold at the retail park. The High Court subsequently held that neither TK Maxx nor Mothercare should be allowed to sell clothing from their stores in the park.

The planning issue was referred to An Bord Pleanala after Noel Frisby Construction, which owns a nearby shopping centre, objected to the type of goods being sold in the park. The board ruled that the intended use was not exempted development as it constituted a change of use from the original planning permission.

The board also held that Mothercare’s sale of baby and maternity clothing, toys and gifts did not come within the activities of a retail warehouse.

TK Maxx spent about €2 million fitting out the 2,415 sq m (26,000 sq ft) store, which was rented at €500,000 per annum.

Waterford Co Council is understood to be considering rezoning the park to allow companies like TK Maxx and Mothercare to trade there.

The park, which is owned by local businessman Jim Treacy, also has the DIY chain BQ, Harvey Norman, Halfords and Home Focus at Hickeys. The various units were let by Bogle estate agents which are currently in discussions with two further tenants interested in moving into the park.

Peter O’Meara of Savills is letting agent for Railway Square.