A tenant of part of the former Debenhams store in Dublin has claimed in Commercial Court proceedings that the landlords have unreasonably refused to allow the unit to be sublet to an international pharmacy chain because of an exclusivity agreement with Boots pharmacy.
In December 2022, SDI Henry Street Debs Ltd, a subsidiary of the Fraser Group plc in Ireland, paid €42 million for the former Debenhams clothes store, which had entrances in the Ilac Shopping Centre and on Henry Street, but had closed in March 2020. Fraser trades in Ireland under brands including Sports Direct, Heatons and Flannels.
The landlords of the Ilac are Irish Life Assurance plc and asset management vehicle Hammerson ICAV.
On Monday, Mr Justice Mark Sanfey agreed to admit the proceedings by SDI Henry Street against Irish Life and Hammerson to the fast-track commercial list. The defendants dispute SDI’s claims.
After hearing arguments from Mark O’Connell SC, for SDI, and Hugh O’Keeffe SC, for the defendants, over objections to having the case entered into the list, the judge said he was satisfied to admit the case and he approved directions on how it should progress.
In an affidavit seeking entry of the case to the list, Oliver Hunt, Fraser’s head of real estate UK South, said the Debenhams premises, which itself formerly housed Roches Stores, had been two units merged into one, with frontage on to Henry Street and inside the Ilac itself.
SDI Henry Street bought the entire unit in 2022 after it was put up for sale by a receiver marketed as an opportunity to develop it into several units, he said.
It began negotiations to lease out part of the premises to the Chemist Warehouse, an international retail dispensing pharmacy chain with outlets in several countries and already trading from five locations in Ireland.
Mr Hunt said SDI Henry Street told Hammerson, the asset manager for the Ilac, about the proposal, but Hammerson was unhappy with there being no link from the store to the shopping centre mall. Mr Hunt said there was no subsisting requirement for this access link.
It sought the consent of the landlords for change of use and said a clause in the lease for the unit provides that the defendants “shall not unreasonably withhold consent to a change of such use”.
In December 2023, Hammerson’s lawyers wrote referring to a 2025 exclusivity agreement with Boots Retail (Ireland) Ltd which occupies a unit directly opposite the SDI Henry Street premises. Hammerson said such a change of use would not be in accordance with good estate management and harm the trade of other Ilac tenants, most notably Boots.
As a result of having to renegotiate with Chemist Warehouse, and other matters, the proposed deal was delayed until September 2024, Mr Hunt said.
A formal application was then made for change of use along with certain works to the unit. Consent was again refused and SDI Henry Street issued legal proceedings.
Mr Hunt said it was their position that the exclusivity agreement with Boots does not bind SDI Henry Street and that the claim of good estate management is “being used to mask the true motivation of protecting the exclusivity given to Boots”.
He also noted that in the Dublin region alone there are nine other shopping centres that have at least two pharmacies.
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