Bewleys set to close

Darc19

Market rent for the premises is likely to be in excess of current rent.

In 2012 in the deepest depths of the recession, it was probably circa 800k


Victoria secret is paying 1.8m across the road in a far smaller unit.


The Cafe simply does not have the business for the overheads. You would need to almost double the turnover / price to make it work.


No issues changing it into a fab fashion store and there were plans previously for a large fashion outlet. Some stores would love the heritage and protected nature.

But once bewleys sold out to a catering company, it lost its magic and whilst tourists will pay a premium for dining in such a beautiful building, it was something locals would not do on a regular basis.

I reckon that it will fetch above current rent when it comes onto the market.

Next may look at moving down the road and adding their beauty hall concept.

L1011

Lease register is public these days - plenty of similar units without the insane planning constraints are on new ~800k leases. Honestly you're delusional if you think it could get more than 1.5m.

Already there are already Grafton Street retailers that we know will not be reopening, and we're nowhere near the sharp end of the closures yet - plenty of stores just won't come back. Rents three months ago are irrelevant to now.

It likely has a market value of about 600k, considering it cannot be anything other than a cafe without a variation to the city development plan - which can only be agreed by councillors. Who aren't going to.

Next can't move in. Nobody except a cafe can move in. And Next won't have the money to do so anyway.

enricoh

Surely the blame should be with bewleys head honcho genius that signed on the dotted line for a rent of 1.5 million? I'm assuming there was no gun to his head at the time!

L1011

enricoh wrote: »

Surely the blame should be with bewleys head honcho genius that signed on the dotted line for a rent of 1.5 million? I'm assuming there was no gun to his head at the time!

The 1987 rent wasn't 1.5m or anything close to it

It got to 1.5m in a 2007 review at the height of Tiger lunacy; and due to what was interpreted by the courts as an upward-only review it couldn't go down.

Muahahaha

L1011 wrote: »

.

It likely has a market value of about 600k, considering it cannot be anything other than a cafe without a variation to the city development plan - which can only be agreed by councillors. Who aren't going to.

Next can't move in. Nobody except a cafe can move in. And Next won't have the money to do so anyway.

How solid would the city development plan be, would the councillors have to vote by simple majority for the use to be changed to clothing retail? From the article Pawned Rig posted it seems Zara thought they could get in there a few years back which presumably meant someone thought it could/would be granted change of use?

As the property bubble reached its height in January 2007, the rent on Bewley’s landmark cafe on Dublin’s Grafton Street was set at €1.464 million when it came up for its five-yearly review. At that stage neither Bewley’s nor its landlord, Ickendel, a company controlled by property developer, Johnny Ronan, seemed to disagree about the figure.

Less than two years earlier, when the cafe closed for a period, clothing chain Zara had offered €2 million a year for the property.

Ickendel subsequently offered Bewley’s €6 million to vacate the premises, but it turned the offer down. If anything, values had gone up since then.

Pawwed Rig wrote: »

https://www.google.com/amp/s/www.irishtimes.com/business/commercial-property/row-tied-to-20-year-lease-agreed-when-bewley-s-sold-grafton-street-to-raise-cash-1.1852021%3fmode=amp

Maybe that is Ronans strategy, he knows he cant get 1.5m from a coffee shop but if he can get the use changed to clothing retail then he can achieve better yields and increase the value of the asset. If he leaves it empty for a year or more there'll be complaints from other traders on the street and then the pressure is put on councillors to allow it to be something other than a coffee shop.

Quackster

Muahahaha wrote: »

How solid would the city development plan be, would the councillors have to vote by simple majority for the use to be changed to clothing retail? From the article Pawned Rig posted it seems Zara thought they could get in there a few years back which presumably meant someone thought it could/would be granted change of use?

Maybe that is Ronans strategy, he knows he cant get 1.5m from a coffee shop but if he can get the use changed to clothing retail then he can achieve better yields and increase the value of the asset. If he leaves it empty for a year or more there'll be complaints from other traders on the street and then the pressure is put on councillors to allow it to be something other than a coffee shop.

There weren't so many Green DCC councillors a few years ago. Not a hope in hell now DCC would vote for the required alteration to the city development plan.

Darc19

L1011 wrote: »

Lease register is public these days - plenty of similar units without the insane planning constraints are on new ~800k leases. Honestly you're delusional if you think it could get more than 1.5m.

Already there are already Grafton Street retailers that we know will not be reopening, and we're nowhere near the sharp end of the closures yet - plenty of stores just won't come back. Rents three months ago are irrelevant to now.

It likely has a market value of about 600k, considering it cannot be anything other than a cafe without a variation to the city development plan - which can only be agreed by councillors. Who aren't going to.

Next can't move in. Nobody except a cafe can move in. And Next won't have the money to do so anyway.

Planning is not restricted to a Cafe. Next are expanding. They just took on 5 debenhams stores in the UK.

There would be no issue changing it to a regular retail store.

The building is over 18,000 Sq ft and is iconic.

The recent rents of circa 750-800k are for far smaller units. Eg white company

Smiggle paid 250k for a ground floor size of 430 sq ft.

It simply is not an economical prospect for a cafe

Quackster

Darc19 wrote: »

Planning is not restricted to a Cafe. Next are expanding. They just took on 5 debenhams stores in the UK.

There would be no issue changing it to a regular retail store.

The building is over 18,000 Sq ft and is iconic.

The recent rents of circa 750-800k are for far smaller units. Eg white company

Smiggle paid 250k for a ground floor size of 430 sq ft.

It simply is not an economical prospect for a cafe

As long as the city development plan restricts its use to being a cafe, the planning authorities cannot grant permission for its use as anything else.

dr.kenneth noisewater

Interview with Johnny Ronan in the Sindo on this I just heard on the radio

RugbyLad11

Boulevardier wrote: »

Another thought: Why are landlords of the type who rent to Bewley's apparently happy to risk a period of several months with no rent coming in from their properties, rather than show some flexibility with existing tenants?

I wonder if there is some legal or tax incentive for them to behave like this? If so, we should be told what it is.

It's a lovely iconic building, maybe a company like Starbucks have approached them before about the building?

L1011

Darc19 wrote: »

Planning is not restricted to a Cafe. Next are expanding. They just took on 5 debenhams stores in the UK.

There would be no issue changing it to a regular retail store.

The building is over 18,000 Sq ft and is iconic.

The recent rents of circa 750-800k are for far smaller units. Eg white company

Smiggle paid 250k for a ground floor size of 430 sq ft.

It simply is not an economical prospect for a cafe

Change of use would breach the city development plan and hence won't happen. It can only be a cafe.

It is specifically protected in the city development plan

Jizique

RugbyLad11 wrote: »

It's a lovely iconic building, maybe a company like Starbucks have approached them before about the building?

Can’t see the numbers working for Starbucks either; stupid move to buy an iconic historical building that can only be used as a cafe - presumably he has no personal guarantee on the mortgages he claims to have on the building, looks like he is preparing to stiff the taxpayer again.

Pawwed Rig

L1011 wrote: »

Change of use would breach the city development plan and hence won't happen. It can only be a cafe.

It is specifically protected in the city development plan

Can this be over ruled by ABP? What the councils decide does not seem to be binding anymore in alot of cases

L1011

Pawwed Rig wrote: »

Can this be over ruled by ABP? What the councils decide does not seem to be binding anymore in alot of cases

Council would appeal legally and likely win. And anyway, the chances are extremely slim to begin with that ABP would grant

It is only housing where ABP entirely rules now

Darc19

Development plan says it "should" be used as a Cafe. It's not an absolute requirement.

Big retailers are queuing up for this according to the business post.

Easy to incorporate a decent sized cafe into anything.

bmc58

Sad to hear.Myself and my wife have happy memories of Bewleys,but times change and move on.If Bewleys were not profitable in this day and age the result is inevitable.Mind you J R could have helped a little more.

L1011

Darc19 wrote: »

Development plan says it "should" be used as a Cafe. It's not an absolute requirement.

Big retailers are queuing up for this according to the business post.

Easy to incorporate a decent sized cafe into anything.

In the language of planning regulations that means it has to be a cafe

Change of use isn't going to happen without that being removed from the development plan and that will never be allowed by the current councillors. This is one of the few things councillors still have control over and they will make a point of showing it

The SBP article is spitballing names, nothing solid. All retailers have basically stopped expansion plans

Jizique

L1011 wrote: »

In the language of planning regulations that means it has to be a cafe

Change of use isn't going to happen without that being removed from the development plan and that will never be allowed by the current councillors. This is one of the few things councillors still have control over and they will make a point of showing it

The SBP article is spitballing names, nothing solid. All retailers have basically stopped expansion plans

No chance unless a retailer is looking at it for click-and-collect

L1011

The SBP article has an apparent expert suggesting Apple. That's all you need to see to know that the suggestions are nonsense and not based on real approaches

Curiousness99

Irish Commercial property Is likely looking at huge drop in value, all the vested interests will be pumping it bigstyle

Darc19

L1011 wrote: »

The SBP article has an apparent expert suggesting Apple. That's all you need to see to know that the suggestions are nonsense and not based on real approaches

It doesn't. It actually says unlikely to suit Apple.

A prime historical building in the middle of one
of Europe's prime shopping streets will be of interest to many retailers.

Large retailers will not look at the short-term issues. They will look at long term. Again Next is a classic example of taking over 5 debenhams stores in the uk last week. (highly unlikely they will take it, but it's an example of what is out there.

Between planning changes and legals it will take 9-12 months to get open. It's likely a vaccine will be along by then and retail will return to a sort of normal.

L1011

You really aren't getting that there is no chance of the planning changes, are you?

Current council will not vary the development plan. ABP will not overrule it. It's cafe or empty. Empty doesn't make any money for RGRE. Ronan is playing a dangerous and very silly game here.

Also you are hopelessly optimistic about how quickly retail will recover.

Next moving on ready to run department stores that are likely available for buttons is not the same as this. Not even close.

There will also be other units available with suitable planning as we're nowhere close to the bottom yet.

Muahahaha

L1011 wrote: »

Current council will not vary the development plan. ABP will not overrule it. It's cafe or empty. Empty doesn't make any money for RGRE.

Thats whats strange about kicking Bewleys out instead of reducing the rent from Ronans perspective. If he cant get change of use on it then he's after shooting himself in the foot.

I would think its his plan to apply anyway. He might try to force the councils hand by leaving it empty followed by intensive lobbying from Dublin Town, Chamber of Commerce, Grafton St retailers etc. Its hard to see any other reason why he is doing this.

Metric Tensor

I haven't read the Dublin City Development Plan, as it's not my bailiwick, but if the premises is restricted to a cafe (in its entirety, rather than "must contain a cafe") then what's required is called a Material Contravention of the Development Plan. Not only must the planners be in favour but a majority of the councillors (three quarters I think) must vote to allow it.

I don't know the dynamics in Dublin City but I'd have to guess that such a thing is unlikely in the short term. If the premises lay vacant for some time, proving it to be unviable as a cafe, that might change though!

Also - the current Development Plan expires in 2022 which I'm guessing means submissions for the new one will be sought in 2021. If someone wanted such a restriction not to be included in the next one having the premises empty could form a good part of the argument.

I don't know how long any owner could stomach leaving such a prime property empty though so all of the above might be conspiracy theory stuff.

I wonder would a large retail outlet with a small part of it as a cafe be a runner.

Quackster

The current make up of DCC would make it pretty hostile to the likes of Johnny Ronan. On the face of it, there's no chance that the next city development plan will relax the condition on restricting the use of the building.

There are two approaches he really could take. The first, as you say, is to put it up to DCC by leaving the building vacant. But I'd imagine that would lead to a prolonged standoff and wouldn't be financially viable if he's reliant on rental income to pay the mortgages on the building.

The second would be to try to negotiate a compromise that could pass muster with the councillors and he does seem to be putting out feelers in that respect with his suggestion of converting part of the building into a boutique hotel whilst keeping a cafe on the ground floor.

Dravokivich

Darc19 wrote: »

It doesn't. It actually says unlikely to suit Apple.

A prime historical building in the middle of one
of Europe's prime shopping streets will be of interest to many retailers.

Large retailers will not look at the short-term issues. They will look at long term. Again Next is a classic example of taking over 5 debenhams stores in the uk last week. (highly unlikely they will take it, but it's an example of what is out there.

Between planning changes and legals it will take 9-12 months to get open. It's likely a vaccine will be along by then and retail will return to a sort of normal.

What? Its littered with Newsagents and fast food restuarants. What makes it so Prime? The presence of a Brown Thomas? If you want affluent retail, go look at Kildare Town Centre.

Obvious Desperate Breakfasts

Deleted User wrote: »

Not sure if you're serious or not, but, out of curiosity, when's the last time you set foot in / purchased anything in Bewleys?

My friend and I went into Bewley’s less than a year ago to escape torrential rain and got two hot chocolates. They were tepid. Went to pay. €13. €13 for two hot chocolates. Checked the menu to make sure that it wasn’t a mistake and it wasn’t. Resolved then to never set foot in the place again. Absolutely shameless gouging. I know their rent was high but that’s not the way to win repeat custom. I think anything I’ve ever had there has been bog-standard. It’s a good location and nice building so maybe if they focused on decent food at reasonable prices rather than trying to fleece tourists, they would have survived.

Darc19

From what I've seen and heard, it is not fixed that it must be a Cafe. "Preference" is for a Cafe, and as above there will probably be a proposal that will incorporate a Cafe.

It won't be Avoca, but think along those lines and there will be little issue.


Yes, retail will recover. Probably take 12-18 months. Bewleys lease was up next year, and with current issues it would have died a slow death even with a rent reduction.

It's nothing to do with Ronan, bewleys lost a fortune (higher than their rent) there last year when tourist numbers were at record levels.

It failed because it was no longer relevant, overpriced and poor choice.

Truthvader

Not up to Johnny Ronan to pay for everyone elses cultural wet dream.

Obvious Desperate Breakfasts

Obvious Desperate Breakfasts wrote: »

My friend and I went into Bewley’s less than a year ago to escape torrential rain and got two hot chocolates. They were tepid. Went to pay. €13. €13 for two hot chocolates. Checked the menu to make sure that it wasn’t a mistake and it wasn’t. Resolved then to never set foot in the place again. Absolutely shameless gouging. I know their rent was high but that’s not the way to win repeat custom. I think anything I’ve ever had there has been bog-standard. It’s a good location and nice building so maybe if they focused on decent food at reasonable prices rather than trying to fleece tourists, they would have survived.

This is it in a nutshell. The place was a disgrace: not very clean, expensive, mediocre quality and crap/outdated service and setup. People getting all misty-eyed about the place when, in reality:

1. they wouldn't darken the doorstep and part with their own hard-earned and
2. the place deserved to go under