The second quarter of 2012 was difficult and particularly challenging for those involved in the retail sector in the Republic of Ireland. The on-going talk of austerity throughout Europe continued to undermine confidence in the market place, encouraging people to continue saving. This resulted in a further drop in retail sales, putting more pressure on retailers. The volume of retail sales decreased by 1.5% in April 2012 compared to March 2012 and there was an annual decrease of 2.7%. The value of retail sales decreased by 1.1% in April 2012 compared to March 2012 and there was an annual decrease of 1.8%.
Activity
The fashion sector has been particularly dormant and as such there has been limited activity in the market place. This activity mainly emanated from sectors such as discount retailing, convenience retailing, coffee shops, pharmacies and restaurants.
In the city centre, Abercrombie & Fitch has commenced fit-out on their store on College Green and hope to be open and trading for Christmas. It is expected that this will give a major boost to the immediate area. On Grafton Street, the letting of No. 37 has been agreed at a reported rent of €225,000 p.a.
As one would expect, discount retailers have been particularly active. Ireland’s largest discount retailer, EuroGiant, secured stores at Maynooth, Roscrea, Dundalk, Ballincollig, Portlaoise and Arklow and is continuing to expand nationwide. On the convenience side, Tesco Express, Centra, Spar and Donnybrook Fair are also active in the market. Tesco Express has recently secured a 279 sqm store on Donnybrook Mall in Donnybrook Village. They have taken the premises on a ten year lease, subject to an annual rent in the order of €85,000. On Shelbourne Road, Centra has secured a 200 sqm unit in the Oval Development at a reported rent of €125,000 per annum. In the pharmacy sector, Boots is particularly active and are looking to open fifteen to twenty stores this year whilst their competitor, Doc Morris, is seeking opportunities in Dublin city centre and provincial towns nationwide. Coffee operators continue to expand. Operators such as Costa Coffee and Esquires have requirements for units of between 185 and 279 sqm and are now looking at out of town retail park locations in addition to their traditional high street and shopping centre pitches. Esquires recently secured a 510 sqm unit in Airside Retail Park, Swords subject to a rent of €70,000.
Dublin Suburban Shopping Centres
The leading suburban shopping centres continue to perform. Dundrum Town Centre continues to attract quality retailers and restaurateurs. Compu B has taken the former Sony Centre unit, Lifestyle Sports has extended into the former La Senza unit and Jamies Kitchen has secured a 465 sqm restaurant at a rent believed to be in the order of €190,000 p.a. At the Liffey Valley shopping centre, Skechers are due to open their fourth store in the Republic of Ireland, while in Blanchardstown Shopping Centre, Nandos has secured a 279 sqm unit at a rent reported to be in the order of €200,000 p.a.
Development
The Minister for the Environment published new Retail Planning Guidelines. The guidelines place an emphasis on achieving more balanced development between town centre and edge of town. The guidelines increase the size cap on supermarkets in Dublin from 3,500 sqm to 4,000 sqm. In Cork, Galway, Limerick and Waterford, the cap increased from 3,000 to 3,500 sqm while the remainder of the country remained unchanged.
In Dublin city centre, ECA Capital is due to commence the re-development of the former Creation Arcade. The proposed development will provide approximately 800 sqm of retail and office accommodation and is anticipated to be completed by June 2013.
The banks have given three former executives of Liam Carroll’s property company the green light to oversee the management and future development of lands at Cherrywood Business Park in Loughlinstown. Part of these lands are zoned ‘town centre’ and it is expected that Cherrywood Properties is to broaden the appeal of the park by seeking planning permission for a new town centre with shopping and leisure facilities. This high profile, highly accessible location is expected to be of interest to a host of retailers.
Outlook
With pressures intensifying, we are optimistic and hopeful that the economic difficulties across Europe will be resolved. While we don’t expect any significant improvements in the market immediately, we expect that confidence will gradually return resulting in an increase in activity. However, for the moment caution will continue to be the order of the day.
