Monday 24 July 2017

Retail parks on the up but problems remain

 

Dublin’s Dundrum Town Centre is Ireland’s highest-rated centre but some rural outlets struggle
Dublin’s Dundrum Town Centre is Ireland’s highest-rated centre but some rural outlets struggle
Samantha McCaughren

Samantha McCaughren

Retail parks and shopping centres around the country have generally enjoyed an improved performance over the past two years, but tenants in many centres continue to struggle, according to new research.

Two national surveys of both retail parks and shopping centres by Retail Excellence Ireland (REI) found improvements for both categories of retail complexes but also that many retailers still had issues with specific locations.

REI carries out the research every two years, surveying over 220 shopping centre tenants with over 650 shopping centre stores and 80 retail park tenants with over 240 retail park stores.

Lorraine Higgins of REI said that while the general trend indicates that profitability at retail parks has improved marginally since 2015 "we cannot ignore the fact that 13 retail parks are deemed unprofitable".

The Retail Park Review 2017 records Castlebar Retail Park as being the least profitable.

However, a spokesman for management at Castlebar, questioned the veracity of the survey and said that two retailers at the park want to double their footprint.

The best overall retail park was deemed to be Mahon Point in Cork.

In the research covering shopping centres, two were deemed 'healthy' in 2017 - in the 2015 review no shopping centre received a healthy score.

Dundrum Town Centre is the highest-performing shopping centre in Ireland. Higgins said: "This is a consequence of many leases being close to the market rent and thus at sustainable levels and a good retail mix enhancing footfall."

Liffey Valley emerged as the other top-rated shopping centre in a survey of 38 of the country’s shopping centres.

Higgins said Liffey Valley performed well because it has “reported an increase in footfall as a result of new retail offerings such as Penneys”. Under the ratings in the survey, the centres were deemed as being in ‘good health’ with scores of close to eight out of 10.

However, 12 centres were deemed unhealthy with The Laurence Centre, Drogheda, Co Louth rated the least healthy when scores on a number of measures were combined.

Higgins said “it is probably experiencing a degree of performance negativity as a consequence of Brexit and sterling devaluation”. The Laurence Centre did not respond to requests for a response.

Higgins added “in total, 28 centres were deemed on average to be profitable for tenants, as opposed to 12 centres in 2015. Our survey shows that conditions have marginally improved for retailers operating in shopping centres.

“There is no doubt with a host of issues facing the industry from Brexit to rents and the migration to online shopping that retailers need to work harder to engage consumers and drive footfall into their shops,” Higgins said.

Retail parks around Co Louth also had some of the lower scores.

While wider economic issues are impacting on retailers, some tenants also called for changes in their relationships with landlords and management companies.

Among the concerns raised by many retail park tenants was the need for improved transparency regarding how their service charge fee is spent. The report found that tenants in 12 parks indicated that they might leave because of this issue.

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