• Twitter
  • LinkedIn
  • Facebook
  • Instagram
  • Client Login
  • Contact
Bannon
  • Home
  • About You
    • Investor
    • Retail Occupier
    • Office Occupier
    • Property Owners
    • Developer
    • Land Owner
    • Lender & Finance
    • Work at Bannon
    • Media
  • About Us
    • About Us
      • Meet the Team
      • Join the team
      • Sustainability
    • Our Services
      • Sales & Lettings
      • Property Management
      • Valuation & Professional Services
      • Consultancy
    • Research & Data Analysis
      • Offices
      • Investment
      • Retail
    • Case Studies
      • VIEW ALL
      • Retail
      • Investment
      • Office
      • Consultancy
      • Property Management
      • Professional Services
  • Property Search
  • Menu Menu

Retail parks, shopping centres and quality streets prove to be the biggest draw for investors

20th July 2023/in Investment, News, Reports, Retail, Shopping Centre

The second quarter proved to be a challenging period for the Irish capital markets sector, with a total value of only €333 million invested. This marks the weakest performing quarter (and half year at sub €1 billion) in the last six years.

This lacklustre landscape can be attributed to three key factors: the end of “free money” as interest rates rise and inflation runs rife, the post-Covid impact of remote and hybrid working on office space demand, and concerns surrounding necessary capital expenditures for ESG (environmental, social and governance) retrofitting amidst rising construction costs.

However, after years in purgatory, it is the retail sector that has emerged as the star performer this quarter, accounting for 38.7 per cent of turnover. Although this performance is partly supported by the downturn in other sectors, there is no doubt that a significant perception shift has occurred, particularly in the retail park segment.

Notably, six retail parks have traded this quarter alone amounting to approximately €116 million including Liffey Valley B&Q, City East, Blackwater, Carlow, Newbridge and Waterford.

The most high-profile of these, Liffey Valley B&Q, which traded to French fund Inter-Gestion REIM for €26.6m, has thrown off a particularly strong equivalent yield in the mid to late 5 per cent range for an asset with a lease that has less than four years to run. This process saw participants such as Realty, Corum and Iroko compete for the asset.

So, what has driven this remarkable change in fortunes?

The “newfound” popularity of the retail sector can be attributed to a slow but building appreciation for what have been long-standing dynamics in both the supply and demand side of the sector. These dynamics differ considerably from the UK and US markets, where Irish retail investor sentiment used to originate.

Unsurprisingly, that core of the demand has shifted to both domestic family offices and a more central European focus where an appreciation for the fundamentals has shown through.

Since 2011, when the last new shopping centre was completed in Ireland, there has been minimal net additional retail supply. This stands in stark contrast to the substantial expansion witnessed in the office, residential, and industrial sectors.

However, during this period, the number of people employed in Ireland has surged by 37 per cent, retail sales volumes have increased by 38 per cent, and Irish households’ net worth has reached new heights. These are all factors which feed the fundamental sustainability of the retail sector.

When considering the cumulative impact of debt reduction, increased savings, and rising house prices, Irish households are wealthier than ever before, with a net worth surpassing €1 trillion for the first time.

This surpasses the 2007 peak level of €716 billion, which was actually exceeded in the final quarter of 2017. Furthermore, Ireland’s gross debt-to-household income ratio has transitioned from over 200 per cent of the European average in 2011 to being below that European average today.

Combining these fundamentals with the historical correlation between inflation and the growth of retail rents and values, the renewed interest in the sector becomes apparent.

As highlighted by the turnover statistics, retail parks, in particular offer a compelling proposition. They benefit disproportionately from household growth and have proven resilient during economic downturns and the challenges posed by Covid-19.

Additionally, their ability to meet ESG requirements through initiatives like PV panels, rainwater collection, and other environmental measures adds value and attracts investors including new entrants. Similar attributes for high-street properties and grocery-led necessity retail are likely to see further interest in these sectors.

We expect to see numerous quality high-street trades in the third quarter and generally as the environmental benefits of the “centralised-distribution model” reflected by retail warehouses, shopping centres and Ireland’s key high streets becomes apparent.

We are seeing a complete return to pre-Covid footfalls for most the of the regional and necessity-focused schemes with Dublin’s two high streets hitting pre-Covid weekly footfall levels again for the first time last month.

As a consequence, we expect the sector to continue to outperform for the coming quarters with no less than seven shopping centres amounting to over €100 million in value due to trade within the next few weeks.

Rod Nowlan is an executive director at Bannon and heads up its office and capital markets team

As published in The Irish Times

https://bannon.ie/wp-content/uploads/./IT.jpg 609 912 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-07-20 10:18:202023-07-20 10:18:50Retail parks, shopping centres and quality streets prove to be the biggest draw for investors

Investment Pulse Q2 2023

4th July 2023/in Investment, News, Reports

This quarter proved to be a challenging period for the Irish Capital Markets sector, with a total value of only €333m. Q2 marks one of the worst performing quarters in the last six years. On a positive note, after years in purgatory, the retail sector has emerged as the star performer for the period, accounting for 38% of turnover. Although this quarter’s relative increase is partly supported by the downturn in other sectors, there is no doubt that a significant perception shift has occurred, particularly in the retail park segment where no less than six retail parks have traded this quarter alone amounting to approx. €116m.

To discuss this, please contact Roderick Nowlan, Alex Patterson, Cillian O’Reilly and George Colyer.

https://bannon.ie/wp-content/uploads/./Dublin-Investment-Market-Q2-2023-Snapshot.jpg 1317 2517 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-07-04 15:42:482023-07-04 16:50:13Investment Pulse Q2 2023

Griffeen Centre, Lucan, Co. Dublin

22nd June 2023/in Investment, News

Bannon are proud to bring the Griffeen Centre in Lucan, Dublin to the market for sale. This resilient neighbourhood centre comprises a strong mix of local services with a Centra (Musgraves Ltd.) anchor in the heart of a highly populated west Dublin suburb.

Please contact Roderick Nowlan & George Colyer at +353 (1) 647 7900 for more information.

https://bannon.ie/wp-content/uploads/./aerial.jpg 500 800 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-06-22 12:18:042023-06-22 12:18:33Griffeen Centre, Lucan, Co. Dublin

Here to Stay? – Investor & Occupier Demand for Space

16th June 2023/in Investment, News, Office, Reports

The effect hybrid working and ESG has, or will have, on office demand from office occupier, investor and owner standpoints cannot be considered in isolation. These influences must be considered within the wider office market ecosystem and how they operate in tandem to drive occupier decision making at lease event dates. The Covid Pandemic brought an instantaneous change to how we work whereas ESG requirements and regulations have been coming into the market at a steadier rate. While there is also uncertainty around the future of working models, that can be adapted and changed rapidly, there is no uncertainty about the increasingly important and dominant role ESG will play in the office sector. The ESG roll out will be slower and changes can be anticipated, however the ability to bring the stock to standard is a far more timely and resource intensive exercise. 

Hybrid working for businesses will effectively assess how staff utilise office space as a resource to produce output. Ultimately it is the company who can decide how to implement their working models and the decisions will be led by the type of work carried out by the business, the need to attract and retain talent and the model that allows the business to grow and produce output efficiently.  Both staff and workspace are a factor of production for a business and how the two are utilised against each other effectively to generate product should ultimately be the key focus of any commercial business. This should craft the post-pandemic workplace in the years ahead and this will likely differ industry by industry. 

ESG considerations will continue to become more prominent drivers in the decision-making process for both occupiers, owners and investors. Currently, ESG in commercial real estate is very much lead by the private and financial markets, with factors such as corporate mandates and lender requirements influencing the demand for ESG grade space. It is envisaged that the regulatory environment (in an EU context) around occupation and investment will become more scrutinous and this will further drive the demand (and requirement) for ESG grade space in the future. 

Occupiers will be looking into the impacts, whether they be positive of negative, that revised working models have on their ability to create an attractive and productive workspace as well as any ESG led requirements that are being implemented on a company specific or regulatory basis. The implementation of these will likely crystallise at either a lease break or expiry where spatial requirements can be most practically revised. Property owners will have to be cognisant of their occupiers’ requirements against key lease dates and how these correspond with asset management strategies to protect both the rental and market value of the building. Alternatively, investors must consider how to preserve or improve on an asset’s income at purchase or where opportunities may lie in bringing brown buildings into a green market. 

Bannon have a suite of services available to assist CRE owners, occupiers and investors in strategic real estate decisions and ESG insights. Please feel free to reach out to discuss by emailing consultancy@bannon.ie.

 

Author:                 George Colyer, Surveyor, Bannon 

Date:                     16th June 2023

 

https://bannon.ie/wp-content/uploads/./dylan-nolte-NIrgENd0sAY-unsplash-1-scaled.jpg 1707 2560 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-06-16 12:51:262023-06-16 12:51:41Here to Stay? – Investor & Occupier Demand for Space

Investment Market – At a glance Q1 2023

6th April 2023/in Investment, News, Reports

The Q1 2023 Bannon Investment Pulse is now available providing a succinct summary of the Capital Markets transactions starting off the year.

With the Residential sector a surprising resilient highlight the total turnover of €625m is reflective of the current subdued sentiment in the market.

For more information or to talk on the opportunities available please get in touch; Roderick Nowlan, Alex Patterson, George Colyer, Cillian O’Reilly

 

https://bannon.ie/wp-content/uploads/Dublin-Investment-Market-Q1-2023-Snapshot-scaled.jpg 1340 2560 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-04-06 15:41:192023-04-06 15:41:52Investment Market – At a glance Q1 2023

Investment Market Review & Outlook 2022-23

30th January 2023/in Investment, News, Reports

For the property sector, while one of strongest capital market years on record (second only to 2019), 2022 will be best remembered as the “year of reckoning”. A year where a mixture of macro-economic and geopolitical issues combined to commence rebasing the market following almost a decade of effectively zero interest rates, low inflation, and expansive monetary policies.

To view the full report, please click here.

https://bannon.ie/wp-content/uploads/Investment-Market-Report-2022-23-Final_Page_01.jpg 1684 1191 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-01-30 11:58:122023-01-30 14:22:01Investment Market Review & Outlook 2022-23

Bannon Investment Pulse Q4 2022

10th January 2023/in Investment, News, Reports

For the property sector, while one of strongest capital market years on record (second only to 2019), 2022 will be best remembered as the “year of reckoning”. A year where a mixture of macro-economic and geopolitical issues combined to commence rebasing the market following almost a decade of effectively zero interest rates, low inflation, and expansive monetary policies.

See the high-level Bannon summary of 2022 in Bannon’s first Investment Pulse of 2023!

https://bannon.ie/wp-content/uploads/Dublin-Investment-Market-Q4-2022-Snapshot.jpg 1317 2517 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-01-10 16:20:082023-01-10 16:20:24Bannon Investment Pulse Q4 2022

Investment Market Commentary Q3 2022

28th October 2022/in Investment, News, Reports

The Irish Commercial Real Estate (CRE) sector performed strongly in Quarter 3 with over €1.77 billion invested in Irish commercial property across 47 transactions. This figure was underpinned by the Ronan Group’s sale of the Salesforce HQ on Spencer Place and a 204-bedroom hotel for €500 million, the largest transaction by some margin. Annual turnover will significantly exceed €5bn for 2022 and establish the second strongest year on record after 2019.

To view the full report, click here.

https://bannon.ie/wp-content/uploads/Dublin-Investment-Market-Q3-2022-Snapshot-1-1500x785-1.jpeg 785 1500 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2022-10-28 11:42:512022-11-01 14:15:26Investment Market Commentary Q3 2022

Investment Market Commentary Q2 2022 – July 2022

18th July 2022/in Investment, News, Reports

The H1 Bannon capital markets report is out now and worth a read as Roderick Nowlan feels certain sectors are passing an inflection point….

To view the full report, please click 

https://bannon.ie/wp-content/uploads/7986-Bannon-Investment-Report-Q2-2022-rev-1.jpg 1403 992 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2022-07-18 12:33:232022-07-18 12:33:23Investment Market Commentary Q2 2022 – July 2022

At a Glance: Investment Market Q2 2022

6th July 2022/in Investment, News, Reports

Strong outturn for H1 in the Irish CRE sector with total turnover breaking €3bn with the benefit of a €1.1Bn Hibernia REIT deal.

https://bannon.ie/wp-content/uploads/Dublin-Investment-Market-Q2-2022-Snapshot-1-scaled.jpg 1340 2560 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2022-07-06 11:08:532022-07-06 11:08:53At a Glance: Investment Market Q2 2022
Page 1 of 14123›»

Search by Category

  • Sustainability
  • Property Management
  • Acquisitions
  • Brochure
  • Construction
  • Charity
  • Development
  • Events
  • Economy
  • Industrial
  • Investment
  • Residential
  • Lettings
  • Land
  • News
  • Office
  • Planning
  • Real Estate
  • Reports
  • Retail
  • Shopping Centre

Archives

Society of Chartered Surveyors - SCSI Ireland

Our Services

  • Sales & Lettings
  • Property Management
  • Valuation & Professional Services
  • Consultancy

Address

Hambleden House
19-26 Pembroke Street Lower
Dublin 2
D02 WV96
Ireland
»Map

Contact Us

Phone: +353 (1) 6477900
Fax: +353 (1) 6477901
Email: info@bannon.ie

© Copyright - Bannon 2017 // Bannon is a registered business name for Bannon Commercial Property Consultants Limited.
Registered in Ireland: No. 384639. // Registered Address: Hambleden House 19-26 Pembroke Street Lower Dublin 2 // PSRA Licence No. 001830
  • Twitter
  • LinkedIn
  • Facebook
  • Instagram
  • Website Terms and Conditions of Use
  • Privacy Policy
  • Cookie Policy
Scroll to top