Court awards Dunnes Stores 50pc cut in rent
WHEN Dunnes Stores went shopping for better value in the courts, the supermarket chain didn't anticipate being given a rent reduction of up to 50pc.
However, the Irish family-run department chain has now become the latest retailer to benefit from a substantial rent reduction through the courts
It joins DIY giant B&Q and high-street fashion retailer Pamela Scott, which were able to secure significant reductions in rents earlier this month.
Circuit Civil Court Judge Jacqueline Linnane yesterday ordered a 35pc reduction in the rent paid to Layden Properties George's Street Limited for 10,500sq ft of retail floor space in the company's store and head office on George's Street in central Dublin.
"The economy is in recession, there is a high rate of unemployment and there has been a fall in retail sales and a decline in consumer spending," she said.
The judge also ordered the rent for the basement storage, offices and ancillary space to be cut by 50pc.
The review of pre-existing rents means the retailer will now pay €32.50 per square foot in its retail area, down 35pc from €50 per square foot.
The rent for ancillary office and storage areas – which takes up more than half of the premises' 23,000sq ft space – was also reduced by 50pc from €15 to €7.50 per square foot and from €10 to €5 per square foot respectively.
Judge Linnane said that when reviewed previously by the court in 2006, the rent amounted to €693,000 a year.
Experts for Dunnes told the court that the rent should be around €225,600 per year, while the landlord's experts claimed that it should be €717,000 per annum
Earlier this month, the High Court approved reinvestment plans for B&Q and Pamela Scott – saving 777 full- and part-time jobs at 20 locations across Ireland – after the stores had been placed into examinership.
The examiners argued that crippling rents – at €5.8m above market rates – were a significant factor in the companies' losses and they were able to renegotiate the rents through the examinership.