Retailer activity in prime Irish locations remains steady despite the current volatile economic conditions, according to a new report by property consultants CBRE.
High profile closures of HMV and other short-term lettings in Dublin city centre have strengthened the vacancy rate but competition and demand for these retail units remains an encouraging sign for the economy.
The ‘Q1 Irish Retail Market View’ shows improvement in economic conditions has stabilised many sectors of the retail market with some reporting year on year progress in profit and generation.
Vacancy levels have increased across the country with prime overall levels in Henry and Grafton Street increasing to 8.3% compared to 3.8% this time last year. This trend is also visible elsewhere, with Sligo levels increasing from 2.5% to 15%.
Availability of prime store locations, competitive retail rent levels and flexible leasing terms have resulted in great opportunities for potential retailers.
The property consultants noted a €47 million investment in the retail market over the first quarter of 2013, approximately 14% of overall Irish investment for this time. The sale of prime retail units 103 and 104 on Grafton Street amounted to €40 million.
Despite the improving consumer sentiment, there has been an increase in administration and examinership announcements in the retail sector. B&Q are ongoing in the process, having recently saved their Athlone store they may avoid further closures.
With any demand focusing largely on Dublin, Zone A rental levels have remained stable over the past 6 months. Prime rents on Grafton street were €4,500 per meter squared at the end of April, with Henry street also strong at €4,000.
There was a decline of 4.1% in the number of shoppers on Dublin streets over January and February in comparison to the same time last year, but there has been improvement here also. More than 223,000 shoppers were recorded in the capital in the final week of March.
Florence Stanley, Executive Director of Retail in CBRE commented on the report, saying: “The significant increase in vacancy levels in Dublin and other cities, while reflective of the tougher economic picture many retailers are facing, will undoubtedly be short term in nature as negotiations are already underway for a umber of the prime located units.
“That said, regional high street vacancy levels are likely to remain in double digits as retailer focus remains on core locations.”
By Gillian Fitzsimons