Outlook boosted by new entrants
Transactional activity has been holding up relatively well in the Irish retail property market despite the weakness of consumer sentiment and the continuing decline in retail sales.
According to the latest market review from CB Richard Ellis many retailers continue to announce new entry and expansion plans, taking advantage of the ability to secure attractive terms and conditions from landlords in the current climate.
While overall retail sales are down 3.9pc in the 12 months to April, some retail sectors have recorded sales improvements in recent months.
More international retail chains have come into the market with 26pc of them currently present -- up from 25pc last year. This makes Ireland the 32nd most international retail market in the world. Dublin ranks 65 out of 150 cities in terms of the number of international retailers present.
The vacancy rate of ground-floor units on Grafton Street is approximately 1.1pc compared to 3.2pc this time last year. On Henry/Mary St the vacancy rate is 0.3pc compared to 5.8pc. Michael Harrington, director of the retail CB Richard Ellis, said this clearly demonstrates demand among retailers seeking units in prime locations.
Despite falling 50pc from their 2007 peak, rents remain under pressure, particularly in secondary and provincial schemes. In many cases, landlords are giving concessions to tenants who demonstrate genuine difficulties. But huge uncertainty remains about Government proposals to review rent review mechanisms.
Nevertheless Mr Harrington concluded that while "the underlying economic situation will continue to impact severely on discretionary spending for the foreseeable future, the outlook for prime shopping centres and the main high streets in Dublin is considerably better than many provincial and secondary schemes and locations."