Outlook for the Irish retail sector remains positive
The availability of retail space in prime locations continues to tighten, with some prime shopping centre schemes operating at 90-100% capacity and just 2.6% high street vacancy in Dublin city centre. Demand from overseas retailers remains strong as they continue to look to expand their operations in Ireland, but they are mostly focused on prime locations. In the last 3 months, we have seen evidence of demand broadening, with the location and sector type for lettings more mixed this quarter. There have been a number of high street, shopping centre and retail park deals signed in Q3. The interest in prime retail warehouse parks has picked up in response to people spending more again on their homes.
Hannah Dwyer, Head of Research at JLL said that „There has been no real change in the retail market in the last 3 months, with similar key trends to last quarter. The market continues to show stability, particularly in prime locations, with steady demand from occupiers, decreasing vacancies and positivity in turnover results“.
Hannah also added that, „The outlook for the final quarter of 2014 and for next year remains positive. Signs of stability in the retail park market have broadened the sector’s recovery, with high streets, shopping centres and retail parks now performing much more steadily than 12 months ago. Although there has been minimum rental growth this year, prime rents are expected to increase in the short-term as supply pressures continue to tighten on high streets and in schemes“.
The recovery remains most evident for prime, with some secondary and tertiary schemes and units struggling around the country. Positive news stories for the economy around GDP and employment have boosted confidence, with improvements in sentiment and retail sales volumes positively impacting turnover results for some retailers. This is expected to continue into 2015 as key economic indicators are forecast further growth.