I’ll make a prediction that half the business currently on Grafton street will not be there in 5 years time unless the property owners reverse their upwards only rent reviews. Since there are a number of pension funds and Johnny come lately investors involved, they probably can’t afford to cut the rent.
How long will Wallis last after this?
They should probably just close the store in the morning and relocate somewhere cheaper.
Maybe they’re still making money with the higher rent, in which case it’s an annoyance rather than a problem
Awarded by whom? I find it hard to imagine a landlord requesting such an increase especially at present, and I find it harded to imagine a tenant agreeing to such an increase
Another valuation head scratcher for NAMA, falling rents and tenants on upward only rent reviews starting to grumble. Is the national interest best served by cheaper costs for tenants, or by binding them to bubble rents they can no longer afford. Answers on a postcard.
Would it be legal for a landlord and shop to come to an agreement whereby the shop pays a big increase in rent, and then receives a “bonus” back from the landlord? Thus allowing the landlord to say they have got a big rent increase so all you other shops better cough up too!
Could be a good way to try and scare off shop owners from working together?
this is essentially what happens in every shopping centre around the country
the developer/property company manages to turn at least one tenant,this then gives him his rental evidence to push for an increase on all the other tenants whose reviews are due
Two clothing shops in the Pavillions swords asked for a rent reduction recently, landlord said no so both shops closed their doors.
Landlord buckled and granted the reduction, both shops are now open again.
The landlord will try to keep the ‘headline rent’ high, makes for good comparable evidence in other rent reviews. In some cases there may be an incentive offered like a rent free period etc. I’d guess that the 48% Wallis case is a rent review after five years.
I walked through the Hibernian Way off Grafton street yesterday for the first time in ages and the place was deserted. A lot of the shops were closed and the only shop that had a customer was the chocolate place Leonidas. It was weird to see so many closed and empty units. It felt like a ghost town, within spitting distance of Grafton Street.
Each closed retail unit = less foot traffic = more likely next retail unit will close, right?
They should pay people to set up shop in there to give the area a bit of a boost.
Who is the landlord for Grafton Street? Isn’t it the Duke of Buckinghamshire or someone like that?
And this line from the piece makes my head spin:
How on earth do you hope to sell enough jeans and blouses to recoup that, even on Grafton Street? I simply do not understand it.
I am probably mixing them up with some other clothes shop that Mrs MW favours but weren’t Wallis in financial trouble around Christmas time?
The article doesn’t say what the rent on the River Island store is, and having never been in there I don’t know if it’s the same size as the Wallis store. But let’s pretend the rent is roughly the same on each.
so 530K x 2 = 1,060,000 a year in rent.
It cost 115,000,000
So a yield of less than 1%
If we take the 787K figure for rent, the yield is still less than 1.5%
Add to that the collapse in the value of property.
Add to that the difficulty in collecting rent from tennants.
Add to that the number of businesses that will close their doors, or move elsewhere.
(perhaps ‘Subtract From That’ would be more appropriate.)
It’s not a pretty picture.
These would be the Anglo commercial loans that Mr. FitzCapitalP was so sure would not be affected by the downturn then?
There are now four empty shops at the entrance to Stephen’s Green shopping centre, giving the place a rather desolate feel as you walk in.
And Daly is a developer and a ‘shrewd’ businessman? Christ, they must have all been drunk on their own ‘genius’ at the time…
I asked the wife to pick me up a sambo and coffee today from a couple of gourmet places we usually go to around Grafton Street today, all closed. Place was empty. I always tried to avoid shopping centres and went to one last weekend. Quiet wasnt the word and some shops were even closed. Retail is suffering and commercial units are left empty in industrial estates. I think this is the straw that will break the camels back. “They” are saying 2010 will be tougher, I think “they” are trying to soften the blow.
I work on george street and often walk aroubd grafton street/dame street/ george street / temple bar at lunch.
Next time you are there i challenge you to look up and count all teh to let/for sale signs over commercial buildings.
It is scary stuff.
No Wallis is part of Philip Green’s Arcadia and they are weathering the downturn quite well. They were only down half a % last year. You are probably thinking of the Mosaic Group which own Principles, Oasis, Coast, Warehouse and Karen Millen among others. Mosaic is an Icelandic company which is mainly in trouble due to the Icelandic bank collapse.
Ditto Rathmines. Last time I looked all these were gone and not replaced:
Barbars behind Slattery’s
2 units in the Swan Centre
All within 30 seconds walk of each other. Maybe some are re-let, maybe some are re-fitting, but for sure all are empty at the moment, and several are certainly businesses gone to the wall.
I’m also sure there are 1 or 2 more I have forgotten.