Sunday 25 February 2018

Investment in Liberties now producing dividends

This Tesco Express on Thomas Street is currently on the market through Colliers as an investment.
This Tesco Express on Thomas Street is currently on the market through Colliers as an investment.

Donal Buckley

A number of factors are combining to boost office, leisure and retail activity in Dublin's Liberties area.

A key factor is the strong occupancy levels at the Digital Hub and Guinness Enterprise Centre (GEC) which between them have close to 200 companies and well over 1,000 people working there.

In addition the shortage of residential accommodation in the city centre and the proximity of the area to Dublin's trendy night spots in George's St, Capel St and Temple Bar have also helped to boost the attractiveness of the area for residential occupiers both owners and tenants.

For years now the Guinness Hop Store has been pulling in the tourists but the derelict condition of a number of buildings on the approach route on Thomas St did little to encourage them to spend time on the street itself. During the years when some of the old shops in the street were allowed to go derelict, this area of the Liberties lost its lively street ambience

One of the latest signs of a recovery on the street was the decision of retailer Lidl just last month to expand its presence by paying more than €6m for the freehold interest of its own building as well as for two adjoining units in order to expand its offering which is expected to include a coffee service for the local lunch and passing trade.

New restaurants are also opening up. In the past six months there's been an increase in cafes and restaurants such as Caffe Comino and Dublin Cookie Co on Thomas St and a new restaurant is due to open this summer at Cornmarket, an area between Thomas St and Christchurch.

And it's not just Thomas St that's doing well but so also is Meath St where three new cafes have opened: Mama Fi's, Catherine's Café and Legit. These are sure signs of the willingness, not alone of the locals, but also the passers to linger in the area and enjoy the buzz.

Part of this buzz comes from the recently re-opened Bull Ring Market on Meath St where Salamisso Developments undertook a major refurbishment of the old market characterised by stall holders.

Now about 40 retailers are trading from the market offering footwear, clothing, homeware, beauty and jewellery products and more.

Salamisso's revamp included the creation of office accommodation overhead and these offices have been taken by Celtrino, a firm which specialises in business process solutions. Not the sort of new business one would have expected to find in a street dominated by traditional Dublin retailers.

Additional new office space is due to come to the market shortly when Emmet House, at 138-140 Thomas Street is refurbished.

Gerard Smith is currently undertaking an extensive refit of Emmet House including a remodelled façade to create a high quality office space, close to The Digital Hub. It may even accommodate some of the expansions that emanate from the start-ups which are initially accommodated at either the Hub or the GEC.

There are also suggestions that the street may soon get a new hotel on a derelict site which recently went sale agreed. That would be a clear sign that the street itself can capitalise on the Guinness tourist footfall.

Demand for its bedrooms may also be helped by visitors to the neighbouring Vicar St entertainment venue.

In addition self catering tourist accommodation is set to increase, at least during the summer months, when the new student accommodation at the Digital Hub comes on stream. A second student hostel is planned for the former Frawleys department store site on Thomas St while distilleries are planned for nearby James St and Newmarket.

Stephen Coyne of the Liberties Dublin Business Area Improvement Initiative, says that the Hub and GEC are fostering growth of service businesses on Thomas Street and adjoining streets. He says the food sector has been under represented in the area until this year.

"With these recent restaurant opening the area is beginning to develop a stronger and more vibrant evening economy of restaurants and good quality pubs and venues. Thomas Street also continues to trade on the strength of everyday services and convenient shopping and there has been good investment in service businesses in the past few months such as Image & Ink on Thomas Street."

A test of the property investment market is currently underway with the launch of a mixed use building on Thomas St which comprises a Tesco Express store as well as five overhead apartments. Located close to the Vicar St entertainment venue and almost opposite the National College of Art and Design, the property produces €178,600 per annum of which €118,000 comes from Tesco's ground floor tenancy and €60,600 a year from the five flats.

Stephen Conway of Colliers International is quoting €2.4m which equates to a net initial yield of 7.12pc after allowing for standard purchasers costs of 4.46pc.

Gerry Macken, chief executive officer of the Digital Hub Development Agency, says the Hub currently has 113,175 square feet of useable office space, located across nine buildings, with occupancy rates of 90pc to 95pc.

"Rents vary depending on the enterprise requirements and are very competitive, compared to other Dublin Commercial office rates, ranging from €20 to €30 per square foot. Prices in The Digital Depot building start from €49 per desk per week."

Currently almost 100 businesses employing over 700 people operate from the Hub making it the largest cluster of digital media, technology and Internet businesses in Ireland. Earlier this month, seven growing digital businesses announced their location there, collectively employing 23 people, these plan further expansion.

They include Bizimply, an Irish tech start up, founded by directors of the successful café chain, Nude, who developed their idea for a more effective way of work scheduling in the restaurant and retail sectors via q management app. It plans to double its employment to 28 within 12 months.

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