A Circuit Civil Court judge has approved a significant reduction in the rent Dunnes Stores pays for its store and head office on Dublin’s George’s Street.
Judge Jacqueline Linnane ordered a 35% cut in the rate paid to Layden Properties George’s Street Limited for 10,5000 sq ft of retail floor space in the 125-year-old listed building.
Meanwhile rental for basement storage, offices and ancillary space would be cut by 50% in a building the company uses as its head office.
"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," Judge Linnane said.
The review reduces the pre-existing rate for the retail area of €50/sq ft by 35% to €32.50/sq ft.
Ancillary office and storage areas - amounting to 54% of overall 23,000 sq ft space - was reduced by 50% from €15 to €7.50 and from €10 to €5 respectively.
Senior Counsel for the chain, Hugh O'Neill, who appeared with James Doherty, and John O'Donnell, SC, who appeared with Padraic Hogan, for the landlord, were granted leave to mention the matter in the next law term following consideration of the judgment.
Judge Linnane said that when reviewed previously by the court in 2006 the rent amounted to €693,000 a year.
Experts for Dunnes had told the court that the rent should total €225,600 per annum as against an estimated total of €717,000 by experts for the landlord.
The judge said an outside-of-premises market survey on behalf of the landlord suggested that, on an estimated turnover and profit potential, Dunnes could afford a rent of between €696,000 and €1,228,640 per annum.
Judge Linnane said the survey, over a period earlier this year, had been based on the number of people entering and leaving the premises, with frontage and access from both George's Street and Exchequer Street, and whether they left carrying a plastic bag or not.
She said it was clear from evidence by an architect that access to the basement was by means of original, very steep stone steps.
Access to three upper floors was difficult as there were no lifts to either basement or upper floors.
The judge said Dunnes did not use the upper floors or basement at all and a considerable amount of both work and money would be required to put them to use for either offices or storage.
Since the last review date there had been a decline in rental values as shown by both new lettings and rent reviews determined by the court.
No figure of the overall new rent was given in court.