Monday 20 May 2019

The right moves: "Pop up" stores on the rise

The former A-Wear site on Grafton Street in Dublin
The former A-Wear site on Grafton Street in Dublin

Paul McNeive

Older agents will have learned to dread the November enquiry seeking to rent a vacant premises on your books over Christmas.

You have an enthusiastic tenant and the possibility of a quick fee, but some landlords don't see the income as being worth the trouble.

Worse still is the reluctant landlord who agrees a deal but "pulls out" late in the day, usually over a concern about insurance. Now, however, changing dynamics in retailing have seen "pop-ups" assume a new importance, underlined by a fresh focus on the area by some estate agents and the entry into the market of a vibrant new player.

The new activity around "pop ups" is partly caused by what's known as "clicks and mortar," that is online retailers increasingly deciding that they can benefit from a physical presence on "Main Streets' and in shopping centres.

Secondly, there is much more marketing activity now in the form of brand launches and events, which create footfall and add to the "shopping experience" which centres seek to create.

Thirdly, I suspect that the pain of holding vacant premises through the recession saw many landlords opting to take short term income and becoming converts to this new world.

Agents Savills and Bannon, for example, have established subsidiaries to focus on the area. Savills have established "Savills Marketing Commercialisation and Research" and Bannon launched a company called "footsure." Both firms are leveraging off their very strong positions as leasing and managing agents for many of the major shopping centres in Ireland. "footsure," for example, offers short term space to showcase and launch products in 32 locations.

Savills retail director Stephen McCarthy told me they can offer retailers the opportunity to trade from prime space, without having to commit to a long lease, and this can be from temporarily vacant units or "mall space."

Many "pop-up" opportunities are seasonal, for example around Christmas and Halloween and there are many well established "pop up" retailers like UK chain "The Calendar Club" who take multiple units throughout Ireland.

Outside shopping centres, Mr McCarthy said that "pop ups" offer retailers extra city centre exposure at key trading times and recent examples are 12 St. Stephens Green, which was leased by Bang and Olufsen and the former "A Wear" on Grafton Street, which was also "short-let."

Tenancies are usually by way of licence and tenants pay an all-inclusive figure to include rent, rates, insurance and any service charge. Stephen McCarthy agreed that insurance is still one of the big issues.

"Tenants need to be professional when approaching a landlord, with a well organised package on insurance and their proposed use," Mr McCarthy said.

A big advantage for landlords is that "pop-up" rents are up to 30pc higher than the normal rate for the property. Another bonus is that short term tenants will usually redecorate and re-fit the store, often adding extra lighting and these can revert to the landlord, by agreement.

A dynamic new player in the market is "Popertee" founded by Lucinda Kelly and I met her to hear about their progress. Established just a few months, Popertee sets out to be "the Airbnb for retail properties." The company is listing major shopping centres on its website and Ms Kelly told me that they differentiate themselves by simplifying the process and moving as much of it online as possible. They also offer a standard licence agreement and insurance policy.

Popertee is also making space available in public buildings and spaces and for example, from this week they will handle "pop-up" opportunities for the Dun Laoghaire Harbour Company on the piers, bandstands and open spaces.

Popertee plans to expand internationally, are beginning to list properties in the UK and are running a pilot project in New York throughout May.

Ms Kelly told me that they work proactively with brands and marketing agencies to generate business. A recent success is the leasing of 1 Dame Lane, Dublin 2, to the "House of Peroni" which will be a two week showcase of Italian food and design, in May.

Another interesting dimension, as Lucinda Kelly told me, is that some property owners who have had a number of successful "pop up" lettings are considering not leasing their buildings long term but specialising in "pop up" lettings, which require more work but where returns may be higher.

With up and coming areas like Shoreditch in London, fast becoming specialist "pop-up" destinations, I expect to see "pop ups" play an increasing role in the retailing mix.

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