CBRE downbeat about Irish retail sector prospects
Published:  26 June, 2009

New research from CB Richard Ellis underlines the continued stress in the retail sector with an increasing number of retailers going into administration and defaulting on their tenancies in reaction to weakening economic conditions and deteriorating employment prospects.

And the agents warn that additional pension and income levies announced in the government’s mini-Budget in April have further exacerbated the situation for retailers with discretionary consumer spending now “severely compromised.”

In its latest market bulletin CB Richard Ellis said the exodus of cross-border shopping into Northern Ireland continues and against this backdrop, many retailers are in negotiations with landlords to secure rental reductions.

However, with more favourable terms now on offer in many schemes, a number of new entrants to the Irish market are now looking at opportunities. Marc O’Polo and Mego opened standalone stores in the Pavilions shopping centre in Swords while American Apparel has agreed terms for a new store on Grafton Street and American retailer Gap will shortly open its first standalone store in Ireland at Dundrum.

In recent weeks, a planning application has been lodged with South Dublin County Council for a major extension at Liffey Valley Shopping Centre. Meanwhile, planning permission has been granted for the development of Phase 2 at Dundrum Town Centre. Cormac Kennedy said: “While this demonstrates belief in the long-term prospects for the Irish retail market, it is accepted that the retail sector generally faces a very difficult time for the foreseeable future.”

In Northern Ireland, CBRE calculates that the economy was boosted by as much as £450m last year as a result of southern shoppers buying groceries in the North. The main beneficiaries have been the supermarkets although a number of smaller retailers have recently opened in both Newry and Londonderry. These include Teddy Mountain at Buttercrane in Newry and Wafer at Foyleside in Derry. However, Brian Lavery in CBRE’s Belfast office said: “There is general downward pressure on rents in the retail sector, which landlords in the main are resisting by agreeing to accept monthly payments and in some cases renegotiating lease terms.”




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