The poorly performing CHQ shopping centre in Dublin’s International Financial Services Centre is to be offered for sale at a fraction of its original cost.
Duncan Lyster of the Lisney agency is seeking “in the region of €10 million” for the former 19th century bonded warehouse which cost €45 million to remodel and redevelop in 2007.
It is an open secret that the elaborately glazed building has incurred losses since opening for business just as the property market was about to take a nosedive. In spite of its trading record, several prominent investors have already shown interest in the forthcoming sale in the belief that they can possibly pick up a bargain and turn CHQ into a successful venue in a relatively short period.
Anyone pitching to buy the former Stack A will undoubtedly want to know why such a prominent and attractive centre underperformed.
It was originally promoted as Dublin’s most exclusive shopping centre but when it failed to attract the top luxury retailers to cater initially for thousands of workers in the financial district, the Dublin Docklands Development Authority was forced to go back to the drawing board. A number of top retail experts were engaged to charter a future course for the centre but despite extensive promotion and marketing campaigns, all efforts failed to put CHQ on a profitable and successful footing.
Last summer the Government announced its intention to wind up the DDDA in the aftermath of the scandal involving the €412 million purchase of the Irish Glass Bottle site. The 25 acres were subsequently valued at just over €45 million.
Space available
Around 80 per cent of the overall space in CHQ is currently vacant.
Only eight of the 22 internal ground floor retail units are rented. Two others on the outside are held on short leases.
The building has 10,219sq m (110,000sq ft) of lettable retail, restaurant and exhibition space out of an overall floor area of 13,749sq m (148,000sq ft).
The relatively small number of lettings in place and the usage of short leases for four tenants will allow new owners to decide on the future use of the centre. To function successfully as a retail centre it would first have to attract a major new anchor tenant with real pulling power to attract a broad mix of Dublin shoppers rather than some of those who work or live in the docklands.
Lyster is suggesting that CHQ, a listed building, could be remodelled to suit a number of uses including a food destination, cultural centre, a showcase building, the largest office floorplate in Dublin city centre, a specialist retail destination or an upmarket covered market.
The 10 traders with units in the centre are contracted to pay rents of €646,000 per annum. However, the amount collected is €451,000 because of an abatement in rents as a result of the harsh trading conditions.
The largest tenant, the Ely Bar and Brasserie, is operating a successful business out of 146sq m (1,571sq ft) on the ground floor and another 83sq m (894sq ft) in the basement. The restaurant has another 18 years to run on its lease.
Mitchell Son wine merchants is another original tenant, occupying 120sq m (1,300sq ft) on a lease which has six years to run. The other tenants are Toss’d Noodles Salads with a floor area of 143sq m (1,525sq ft) and men’s fashion chain Louis Copeland with a 111sq m (1,190sq ft) shop held under a lease which has more than four years to run. Carphone Warehouse trades out of a unit extending to 87sq m (940sq ft) under a lease which has over 19 years to run.
Starbucks is also renting 96sq m (1,037sq ft) under a lease which has another nine years to run. Another coffee shop, Insomnia, has a lease which runs out in three months.
Other short leases are held by Gio Italian Fashion and Bakehouse. A florist and a fitness studio also rent space on a week-by-week basis.
Three external units at ground floor level facing George’s Dock have direct access to five basement vaults.
CHQ was built in 1821 as a tobacco store with basement vaults to store wine. It is one of the few dockland warehouses protected under the planning acts.
It was the venue for one of the great social events of the mid-19th century, the Crimean War banquet.
