Tuesday 25 September 2018

McKillen Jr eyes Clerys hotel as redevelopment ramps up

An artist’s impression of the proposed redevelopment of Clerys’ former department store
An artist’s impression of the proposed redevelopment of Clerys’ former department store
Ronald Quinlan

Ronald Quinlan

The new owners of Clerys have engaged the services of property agents from Knight Frank, Savills and CBRE to secure office and retail tenants and a hotel operator as part of their plans to progress with the redevelopment of Clerys' flagship department store premises on O'Connell Street, the Irish Independent has learned.

It is understood that Knight Frank have been instructed by Natrium to find occupiers for the office element of the ambitious scheme, while Savills have been tasked with sourcing retailers.

CBRE, for its part, has been retained to advise Natrium - a joint venture comprising Deirdre Foley's D2 Private and Cheyne Capital Management - on the selection of an operator for the boutique hotel, which will be located to the rear of the former department store on Earl Place.

While the search for occupiers is still at an early stage, it is understood that the Clerys redevelopment has attracted interest from a wide array of leading Irish and international businesses.

Developer and Press Up Entertainment chief Paddy McKillen Jr is, according to sources, one of up to 30 parties interested in operating the scheme's hotel, while both the acclaimed US Italian-themed restaurant chain, Eataly, and the leading London restaurant operator, Rhubarb, have had talks with Natrium in relation to the operation of Clerys' proposed rooftop dining area.

The Belfast-born owners of New York's famous Dead Rabbit bar are also understood to have expressed their interest in opening a venue within the redeveloped department store.

The news of Natrium's search for, and discussions with potential occupiers for the Clerys scheme should serve to dampen growing speculation within the property industry suggesting that Clerys is being readied once again for sale.

A spokesman for Natrium declined to comment on that speculation when contacted by the Irish Independent.

A source familiar with the matter insisted however that the company's plans to redevelop the former department store were proceeding apace.

While that may well be the case, there is little doubt that Natrium would find its bargaining position greatly enhanced were it to offer Clerys for sale in the future with its offices and retail pre-let and with a hotel operator in place.

The Clerys saga has been running since 2015 when Natrium acquired the former department store from Gordon Brothers for €29m.

Having secured ownership of the business in a deal signed off between the parties at 2.30am on June 12, 2015, Natrium closed its flagship O'Connell Street premises without notice, with the loss of 460 jobs.

The move met with a wave of public anger, later reflected in numerous objections to Natrium's plans for the redevelopment of the former department store building.

Dublin City Council granted planning permission in December 2016 for a mixed-use scheme comprising offices, retail units, leisure facilities and a boutique hotel on the site.

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