Grafton Street Rents

(May 2024)

It is very important for both landlords and tenants on Grafton Street to know that rents have fallen considerably from their peak back in the late 00’s and have again fallen since the Covid pandemic. The reason for this is simply caused by a massive reduction in footfall numbers in the city centre and it is continuing it’s downward trajectory. Tenants are fighting back and demanding much better terms on their leases.
 
It is now widely accepted that working from home (WFH) has had a major impact on footfall in the city centre and in turn has had a very negative impact on retail and hospitality businesses in the area. WFH habits are now a permanent feature in the workplace and this footfall will never return.
 
Furthermore, the ongoing policy of redirecting vehicle traffic away from the city centre is altering shopping patterns massively. Dundrum, Liffey Valley, Blanchardstown etc are all beneficiaries of this policy as the city centre loses it’s appeal due to difficulty with access, safety concerns and a general hollowing out of the city centre (ie look at Stephen’s Green S/C for example).
 
It is also worth noting that there are plans to ramp up traffic restrictions significantly in August 2024 with even buses will be diverted away from a major road artery at College Green. This will, without a doubt, cause significant further erosion of footfall.
 
Whilst the longer term plan of adding a metro system in the city centre is very much welcome by all parties concerned, this is going to take several years of massive disruption in the city centre which is going to add even greater downward pressure on footfall numbers. It is projected that the metro works will not be completed before 2035.
 
So in summary, it is vital that all businesses band together to ensure that rents fall significantly further for the foreseeable future. This is the only way businesses will survive through this incredibly challenging decade long period. Landlords need to understand the days of ever increasing rents are long gone and it is now a tenants market.
 
One major tool available to all tenants is to only agree to 5 year long leases and when renewing their lease (there is a legal right to renew leases with terms of 5 years or more), to use the courts as a backup in the absence of a sensible rent agreement with the landlord. By doing this you will avoid the completely landlord biased arbitration process entirely. The reason why it is biased is because commercial agents are effectively the arbitrators and they only represent the landlords interest who are ultimately their paymasters (it’s a very incestuous like that!).
 
As more and more tenants on Grafton Street and the surrounding area are getting together and sharing information, we are finally turning the corner in getting rents down on the street and keeping them down. This movement is gathering pace and expect to see more press releases soon that give a real perspective on what’s actually happening on the ground.
 
If you are a potential buyer of any property on Grafton Street, we strongly encourage you to consider the price you are paying for the property. You will not enjoy any rent increases and you will most likely be dealing with considerable vacancy rates on and off over the next decade for all the aforementioned reasons. Why would you risk your hard earned capital for an asset that will produce such a poor return, you are much smarter than that surely?  At the time of writing this article there are 8 properties for sale on Grafton Street, the smart money is leaving the street!
 
If you are a potential property buyer or tenant  and would like an opportunity to talk to a business operator who has been trading on Grafton Street and the surrounding area for almost 30 years now (as of May 2024), please feel free to email info@graftonstreet.ie and you will get a proper insight into what is actually happening on the street.
 
The age old trick of landlords using financial engineering to push up the value of their property ie- putting higher headline rents on leases and giving a rebate to the tenants etc (any side letters now have to be declared on the Commercial Lease Register for all to see the real deal!), is now a thing of the past.
 
In short, the game is up for landlords…
 

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