Monday 16 December 2019

Building wave continues with Dawson Street revamp

Green Reit is in the process of building this property at Dawson Street in Dublin 2
Green Reit is in the process of building this property at Dawson Street in Dublin 2
Donal Buckley

Donal Buckley

A number of investors and developers have recently targeted Dawson St in moves aimed at taking advantage of its future when it becomes home to one of Dublin's must lucrative Luas Stops next year. Consequently the Luas may transform the street in more ways than might have been expected when it was originally announced.

Recently at least two developers have been working on plans to take advantage of the demand among major international retail fashion chains for larger stores than most of those on Grafton St. The shortage of such stores has been one of the long-time criticism of Grafton St and one which boom developers such as Bernard McNamara and Joe O'Reilly sought to address by assembling sites to the west of Dublin's super prime shopping street. Now it looks like the combination of the Luas and the return to a more liquid Irish commercial property market has swung the pendulum to the East and Dawson St.

World champion golfer Rory McIlroy is one of the latest to target the street. He recently teamed up with Neill Hughes and Peter Crowley at FL Partners to buy 51 Dawson St for around its €4.25m.asking price It is located on the corner with Duke St, which looks set to provide a key link between a new Dawson Luas stop and Grafton, Wicklow and George's streets.

Brian Shields of JLL, who handled the sale of 51 Dawson, said at the time of its launch that its asking price would reflect a net initial yield of 6.5pc. More than 80pc of its €290,000 rent roll comes from retailers who include Featherblade steak restaurant and menswear outlet Baumler and it offered scope to refurbish and let out some of the upstairs space for offices.

But more ambitious redevelopments plans are in the pipeline for at least three other major properties on the street. These include the transformation of the nine retail outlets at Nassau House on the corner with Nassau St by a joint venture led by London investors Meyer Bergman and BCP International Property Fund. In addition Friends First is working on its planning application for a revamp of Royal Hibernian Way (RHW) which includes an arcade link to Duke Lane which in turn connects via Lemon St to Grafton St.

Facing RHW, construction work is underway on Green Reit's One Molesworth which will offer 40 metres of retail frontage onto Dawson Street replacing a number of small shops with two larger stores.

But the new Dawson St retailers will not be relying on a spillover of Grafton shoppers for their trade. They already have a busy footfall coming from a range of activities including the busy bus stops as well as the surrounding offices. At present the Nassau corner has extremely busy footfall due to thousands of students who attend both Trinity and Independent Colleges and who frequent the cafes and bookshops near this busy corner. These are supplemented by the many tourists who visit Trinity, The National Gallery and other attractions.

Such footfall looks set to be further increased by new office developments underway off Dawson. Up to 2,000 people may well be employed in three new office developments. These include Green Reit's One Molesworth St which will have about 72,000 sq ft of offices; Green Reit's 32 Molesworth St with 28,000 sq ft of offices and IPUT's 10 Molesworth St.

Green's development at One Molesworth will also include 19,000 sq ft of retail at 13-17 Dawson St catering for two units. A spokesperson said that the new retail space "is being pitched as a unique branding opportunity for internationally renowned retailers seeking flagship representation in Dublin city centre, with Grafton Street only 130 metres away. The building is due for completion in quarter 3 of 2017. On tenant type, all I can say at the moment is that it won't be big box retail and will be high-end."

Meanwhile Friends First, the life assurance and investment company is expecting to submit a planning application before the end of this summer for a revamp of its RHW which faces Molesworth St and serves as a link between Leinster House and Grafton St.

Earlier this year, Friends First acquired the remaining 50pc of Royal Hibernian Way and has engaged architects to explore the potential refurbishment opportunities. The property includes about 75,400 sq ft of office space occupied, in the main, by Davys, together with a ground floor, open air, retail mall of about 21,500 sq ft.

Friends' plans include the change of use from retail to food usage for a number of its units. Suzie Nolan senior manager with the investment division of Friends, explained that "The existing units are antiquated in size and layout and Friends First is examining the reconfiguration of these stores along with upgrading the shop fronts and mall area. The redevelopment plans will also include additional office space."

Meyer Bergman and BCP's plans for Nassau House are also expected to include a revamp of its 80,000 sq ft of offices. In addition their latest acquisition of five shops on Nassau St is understood to be aimed at further increasing supply of larger retail stores. This latter acquisition, which is believed to have involved paying more than €13.5m to vendor Ardstone Capital, brings to 14 the number of retail outlets that the joint venture has in the precinct.

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