The retail outlook
Published: 05 November, 2007
The most recent pedestrian counts on Dublin's prime shopping streets confirm that the Irish retail sector continues to perform well, with a year-on-year increase in footfall of almost 26 per cent on Henry Street and a remarkable 44 per cent recorded on Grafton Street in the third quarter of this year, according to CBRE.
Head of retail Cormac Kennedy said consumer spending remains strong with retail sales having increased by 6.8 per cent in the year to July 2007 - a good result considering the bad weather which undoubtedly impacted on trade during the summer.
"Retailers remain confident, with ambitious national roll-out programmes being pursued by both domestic and overseas operators," he said. "Zara has announced that it will anchor the second phase of development at the Pavilions scheme in Swords, while Marks & Spencer and New Look are both to open units at the Fairgreen shopping centre in Mullingar. Harvey Norman expects to open four more stores in Ireland over the next 12 months and Heaton's plans to extend its domestic outlets from 58 to 100 over the next four years."
Kennedy believes that redevelopment of existing retail centres is now more prevalent than applications for new schemes. For example, in recent weeks, another phase of development at Donaghmede shopping centre in Dublin and a new 31,000-sq m shopping centre in Wexford were granted planning permission.
"It's fair to assume that a reduction in housing completions in Ireland will lead to a lower rate of expansion in some sectors of the market in the medium term," concluded Kennedy. "However, for the most part, the retail sector is in very healthy shape for what is likely to be a strong Christmas trading period, regardless of wider economic and financial concerns."
CBRE investment director Colm Luddy believes this optimism is largely shared in the capital markets. He draws a distinction between Ireland and the UK market, where there is evidence of yields softening in some sectors. "There has to date been little evidence of yield movement in any sector of the Irish investment market," he said. "We remain confident that the value of prime properties will continue to show resilience."
