Dublin retail rents fall at slower pace in Q3
Dublin city retail rents showed a significant slowdown in their rate of decline during the third quarter of the year and some sectors such as Grafton St, as well as suburban shopping centres and Dublin retail warehouses, saw unchanged rents. However these features appear to be the exception rather than the rule based on the findings of Lisney's rental indices for the three months to the end of September.
Lisney's overall retail rental index fell by 1.6pc in the three months to the end of September. This compares favourably to the first quarter of the year where overall retail rents fell by 10.7pc. On an annual basis the index fell by 25.4pc and since market peak in the latter half of 2007 by 43pc.
Grafton Street's stabilisation appears positive considering that Henry St rents continued to fall in Q3 by 5.9pc. On the other hand, Henry St rents had not fallen as sharply as those in Grafton St during the earlier part of the downturn. Grafton St rents are down 20.7pc over the 12 months and by 47.7pc since market peak.
In contrast, Henry St rents had fallen by 30.4pc over 12 months and 38.5pc from their peak. Furthermore Grafton St rents at an average of about €5,750 per sqm, are still higher than those in Henry St which average about €4,000 per sqm.
For the third consecutive quarter, in Q3 there was no decline in either Dublin suburban shopping centre rents which had already fallen by 35pc from peak to an average of about €2,500 -- €2,750 per sqm. Dublin retail warehousing rents also stabilised at around €150 per sqm after having fallen 52.4pc from peak.
High-street rents in Cork, Limerick and Galway also continued to fall at a slower pace with an average decline of 2.6pc in Q3.
Cork has fared the best of the provincial cities with prime retail rents now down 32.1pc from peak.
Commenting on overall retail trends, Lisney spokesperson Aoife Brennan said: "The nature of transactions continues to adjust to the new landlord and tenant dynamic. Shorter leases, greater incentives and turnover provisions prevail."
While activity improved in the Dublin office sector in Q3, rents in the city centre fell by 5.7pc and by 23.5pc for the year.
Ms Brennan said office take-up levels are "up almost 27pc on Q2 figures" and the majority of recent transactions were in the city centre with IT the most active sector. Nevertheless, overall Dublin vacancy increased slightly to 23.1pc.
Rents in Dublin city centre have fallen by 54.3pc since peak. The suburbs, with their much lower rents, have fallen by between 32.3pc and 48pc from peak and by 8.7pc to 12pc in Q3, depending on location.