Dublin's Retail Sector Uncertain And Lacks Strength, According To Colliers
Dublin’s retail sector presents an uncertain market that lacks the strength and resilience seen in other industry segments, according to the Irish Times.
The Times said that, according to Colliers International, the real estate advisory group, retail accounted for 50% of all investment transactions in 2016 but only managed 28% last year.
Colliers added that it fell to “a mere 3.3% in the first quarter of 2018”.
“What has been noteworthy is how the sheer weight of international capital that pursued retail investment opportunities drove down yields while there was limited new occupier demand to underpin rental flows and drive rental growth,” Colliers told the Irish Times.
“This is in marked contrast to the office sector where values have been driven by investor demand and the continuous supply of tenants with huge appetites for space.”
Colliers has highlighted that despite an increase in sales growth in June, up 4.6%, this is mainly driven by sales volume.
It adds that value sales have failed to match volume’s growth, leading Irish retailers towards a discount culture rather than “increasing their real estate footprints”.
Colliers indicated that online trading is slowly taking over and threatening bricks and mortar retailing, reporting that 12.5% of Ireland’s annual consumer spend is done online, 60% of which is with overseas companies.
It used Next as an example, as it recently announced that its online sales grew by 8% while its in-store sales dropped by 10%.
Food & Beverage
However, Colliers did note that the food and beverage sector in Ireland is growing strong and attributed Irish groups like Bunsen, Mercantile and Boojum.
“Easily the most high-profile food and beverage transaction this year has been the opening of The Ivy by Caprice Holdings in Green Reit’s prestigious new development at One Molesworth Street,” Colliers said.
“Owners of shopping centres are also focusing on improving their food and beverage and leisure mix to make shopping more experiential in order to defend footfall and increase dwell time. Expect to see more and more focus on all this moving forward.”
© 2018 Checkout – your source for the latest Irish retail news. Article by Aidan O’Sullivan. Click subscribe to sign up for the Checkout print edition.