Commercial property consultants (CBRE) have released a report on the Irish retail sector, which suggests that improvement in retail sales and occupier activity over 2014 has been reflected in prime rental growth in areas of Dublin.
The report states that there is 'a lack of available prime units' to satisfy demand from international retailers on Dublin’s Grafton Street, citing a retail vacancy rate of 2.3%, which has led prime Zone A rents to increase to €4,500 per square metre per year.
Meanwhile, a lack of available accommodation is fuelling growth in prime shopping centre locations, as prime rents in Dublin’s Dundrum Town Centre increased to €4,000 per square metre per year in Q3 this year, second only to Grafton Street in prime rent terms.
Agents note that rental growth has still not materialised in locations with high density of retail park accommodation per capita. The study states that high street vacancy levels contracted to 3.2% on Dublin’s Grafton Street and 6.4% on Henry Street in Q3 2014, down from 7.5% and 12.8% respectively.
Simon Cooper, Senior Director of Retail at CBRE Ireland commented, “This trend has not filtered down to regional locations or those with continued high vacancy levels, where owners of retail properties are struggling to attract occupiers."
However, Sean Murphy, Deputy Chief Executive of Retail Excellence Ireland told Retail Intelligence that suggestions that rents are on the increase may be premature.
"The view of Retail Excellence Ireland and its members is that one or two somewhat frothy deals does not beget a trend," he said, "and those deals may well have been driven by the need for a certain investor to get into a prime retail area. It doesn't reflect the broader market, and it certainly doesn't reflect the market beyond the M50.
"If you have a vested interest in driving up rents, would you not have an interest in accentuating the positives from a rental perspective, versus recognising or documenting what the situation on the ground?"
© 2014 - Checkout Magazine by Emily Horne.