Kennedy Wilson seeks €33.5m for Dundalk’s Marshes Shopping Centre

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While the traditional retail sector continues to evolve in response to the challenges presented by the rise in online shopping and the questions posed by the Covid-19 pandemic, the presence of two of Ireland’s most successful and resilient brands as anchors coupled with significant rental income from a strong tenant line-up is expected to attract interest from both domestic and international investors in the sale of the Marshes Shopping Centre.

The Dundalk scheme — acquired by its current owners, American real estate firm Kennedy Wilson, for €44.5 million in 2014 — is being offered to the market by joint agents CBRE and Bannon at a guide price of €33.5 million.

Anchored by a 71,600sq ft Penneys and a 116,500sq ft Dunnes Stores (grocery and drapery), the Marshes Shopping Centre has consistently delivered robust trading and occupancy levels and proved resilient through the Covid-19 pandemic. The scheme is approaching a 100 per cent occupancy rate with its two remaining vacant units currently the subject of negotiations with prospective occupiers. Outside of its anchor tenants, the centre is generating a net operational income of about €3.4 million per annum from leading retailers including Boots, H&M, Eason and JD Sports. Some €400,000 of this income is being derived from the scheme’s surface car park, which also offers development potential according to the selling agents. The guide price of €33.5 million reflects a net initial yield of 9.2 per cent and a capital value of €233 per square foot.

Built originally in 2005 at a cost of €120 million, the Marshes Shopping Centre boasts a diverse national and international tenant mix including grocery, necessity retail, fashion, and food and beverage distributed across a lettable area (excluding anchors Penneys and Dunnes Stores) of 13,366sq m (144,000sq ft) on a site of 27.6 acres. The scheme has a prime location in Dundalk town and is widely regarded as one of the foremost retail centres for the wider northeast region.

In the short term, the investment offers the purchaser strong and sustainable rental income with multiple asset-management and income-growth opportunities including leasing up the remaining vacant space (last two units). There are a number of redevelopment options available also subject to planning permission, according to the selling agents.

Commenting on the sale, Roderick Nowlan, director at Bannon’s capital markets division said: “The acceleration of change within the retail sector, driven by Covid, has highlighted the strength of strong regional centres, especially those with robust grocery and necessity retail anchors as well as internet-resilient occupiers such as Penneys and Dunnes. The strong rent and service charge collection performance of this asset reflects this position.”

Kyle Rothwell, executive director at CBRE’s capital markets division, added: “We anticipate strong interest for Marshes Shopping Centre. The centre is performing exceptionally well and is supported by two very strong anchors and a complementary tenant mix. This scheme will appeal to those who are looking to complete short-term asset management and subsequently benefit from a fully let scheme.”

Article by The Irish Times

Neil Bannon on Dublin City Centre

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One of our recent Retail Pulse reports was referenced by David McWilliams in his article in Saturday’s Irish Times. The article suggests that one of the reasons for vacancy in the city centre is that Owners are demanding rental levels “priced to a pre COVID world” hoarding vacant property. The reality is very different, from a position of relative stability through 2018 & 2019 High Street rents dropped sharply, i.e. 40% by Q4 2020. They started to recover some of this loss in 2021 but are still down about 30% from 2019 levels. Current values on Grafton Street are just over half the level they were at the Celtic Tiger peak whereas values in every other real estate sector are now above their 2007 level. These are not my figures but are sourced from the MSCI Index.

From the Bannon perspective we have recently concluded 3 deals on Grafton Street and are in active discussions on many more. I don’t share David’s pessimism on Dublin City Centre and expect to see a more diverse and cosmopolitan retail mix emerge over the next year as these deals come to fruition, perhaps even a “vivacious metropolitan centre”.

If you want access to data on the retail and other sectors, click here.

 

The Large-Scale Residential Development (LRD) Process explained

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The new Large-Scale Residential Development (LRD) Process came into effect on the 17th December 2021 bringing to an end its much-debated predecessor the Strategic Housing Development (SHD) scheme which commenced in 2016. The primary aim of the SHD process was to fast-track planning applications for developments of over 100 residential units or 200 student bed spaces.  While the primary aim of the LRD process remains the same as the SHD process, the major difference is that such applications will now be considered by the relevant Local Authority first rather than SHD applications which were lodged directly to An Bord Pleanála.

 

The LRD process can be broken into four distinct steps as follows:

I. Pre-Application (Section 247) Consultation with Planning Authority

8-week period of consultation with the relevant council.

II. LRD meeting with the Planning Authority and LRD Opinion

After the pre-application consultation, an LRD Meeting which is required to obtain an “LRD Opinion” concludes if “the proposal constitutes a reasonable basis for submitting an LRD planning application”.

III. LRD Application is Lodged

This must be done within 6 months of receiving the LRD Opinion.

IV. Decision

After the application is lodged the relevant Local Authority has 8 weeks to make a decision.

 

Following the decision of the Local Authority a right of appeal to An Bord Pleanála is available.

It is hoped that the reintroduction of the initial observation to the Local Authority and the subsequent appeal stage to An Bord Pleanála will help to reduce the large number of Judicial Review cases which have become prevalent in recent years.  Furthermore, the initial consultations at local level should tease out contentious issues early in the application process.  However, it remains to be seen at this early stage of the LRD scheme whether or not the revised process will result in lower levels of Judicial Reviews and assist with the delivery of much needed residential developments.

 

Author:                Ronan Lavelle, Surveyor, Bannon

Date:                    13th June 2022

The Mater Foundation

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The Bannon team totalled up an impressive 3,227.40 miles for The Mater Foundation.

Bannon is delighted to present a cheque to the Foundation for €3,227.40 as well as €2,255.00 online donations, which will hopefully go some way to supporting improvement to patient care.

We want to thank those who got involved once again for all their efforts during a long, cold and wet February. We are proud of the team knowing we can make a difference when working together.

112/113 Grafton Street

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Bannon is delighted to have been part of a very successful launch today of 112/113 Grafton Street. A superb retail building redeveloped to the highest standard by Irish Life Investment Managers. 13,000 sqft of top quality space now available through Bannon and joint agent Savills.

Bannon Rent Review Report – Office Sector

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The commercial rental market is on the cusp of significant change. The true impact of Section 132 of the Land Conveyancing Reform Act 2009 is now impacting all reviews. Learn how our highly experienced team can help you with your rent review.

To view the full report, please click here.

Bannon adds Citywest Shopping Centre to its impressive retail property portfolio

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Date 31st May 2022: Retail property market leader, Bannon, has been appointed by Ardstone to manage Citywest Shopping Centre.  This is the latest in a series of new wins for the firm.

The Citywest area was launched in the 1990s with the building of the business campus and hotel, the largest in the country.  The development, was followed by an explosion of residential property, with planning in place for additional houses and apartments.  In 2007 Citywest Shopping Centre was opened with retail units varying in size from 816 to 7,502 square feet.

Bannon is Ireland’s largest, domestically owned commercial property consultancy firm.  It manages over 50 retail shopping centres and retail parks across the country, covering seven million sq.ft. of commercial real estate worth c. €2 billion.  As market leaders, Bannon has advised and managed the country’s most notable retail spaces in the last thirty years such as Stephen’s Green S.C., Dundrum Town Centre, Blanchardstown S.C., Swords Pavilions. and The Square Tallaght.

Commenting on the new addition to their portfolio, Director of the Bannon Property Management team, Ray Geraghty said “Bannon are delighted to be working with Ardstone on what is another very significant shopping centre instruction. This instruction is further validation of the unrivalled expertise which the Bannon property management team possess. We are looking forward to bringing this experience to bear over the coming months which will be particularly relevant given the proposed residential development which Ardstone have planned for the site adjacent to the shopping centre.’’

For further information contact: Ray Geraghty Email: rgeraghty@bannon.ie Tel: 01 6477900.

Neil Bannon joined Newstalk Bobby Kerr on Down to Business

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Neil Bannon joined Newstalk Bobby Kerr on Down to Business on Saturday to discuss the medias negative perception of the Irish retail market.

While a negative narrative persists in the media, Neil points to CSO data that shows that the three-month moving average of retail sales values is substantially higher in March 2022 than it was Pre-Covid.

Neil & Bobby also discuss the future of Irish High Streets, how they were affected by Covid and the reset on Grafton Street with the arrival of new brands.

For the full discussion, please click here.

Bannon Retail Pulse Report – May 2022

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We are delighted to share our latest Bannon Retail Pulse.

The ongoing global macro-economic uncertainty is having a significant impact on consumer sentiment. Inflationary concerns coupled with an anticipated rise in central bank interest rates has provided a more uncertain backdrop and is something we will be keeping a close eye on in the coming months.

To view the full report, please click here.

Consumer Sentiment

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Sustained slide in Irish consumer sentiment points to major reassessment of economic and financial conditions.

The KBC Irish Consumer Sentiment Index slipped again in May for the fourth consecutive month. The previous four occasions this has happened in the twenty-six-year history of the survey reflected circumstances in which consumers faced marked difficulties in assessing potentially momentous changes in economic conditions. The last time the survey slipped for four consecutive months was in the summer of 2019 amid concerns over Brexit.

The current slippage follows the conflict in Ukraine and electricity/gas price hikes of 15-40% implemented by energy providers in the past two months. However, credit/debit card and Retail Sales data do not yet point to any material slowdown in spending, with expenditure on hard hit sectors such as accommodation and hospitality still recovering in May.

Property Picnic is now sold out!

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Great news….Property Picnic in aid of Cancer Trials Ireland is now sold out!
We are delighted to launch the Property Picnic Online Auction which is now Live with items sponsored by Dublin Airport Central, Red Rock Developments, SCSI – Society of Chartered Surveyors Ireland and ourselves Bannon including Four 6 Nations Rugby Tickets (last game of the series), A Ballyfin Demesne State Room experience, 4 Coldplay Tickets in Wembley (plus flights) and 2 return tickets to NYC (with Platinum Services through the VIP terminal).
Take a look at the prizes and register. You don’t need to be there to bid! Winners announced on the night.
If you still like to make a donation, please click the link below:

Bannon is Expanding

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The Bannon Property Management team is expanding with the addition of Iain McGann (pictured right). Iain brings a wealth of experience having worked most recently in BCM Global’s Dublin office as an Asset Manager. Ray Geraghty – Director of Property Management (pictured left) said “We are delighted to welcome Iain as we grow the team and continue to extend our reach in the market”.

Property Picnic

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Property Picnic was officially launched last week and to say that we are blown away by the support and generosity of so many is an understatement. Our primary focus in creating the event was to celebrate the life of our much-loved colleague Louise Creevy (nee Doherty) who sadly passed away last year and in doing so we also wanted to honour our industry colleague Jason Miller who also sadly passed in 2021.

We wanted to create an event that reflected Louise and Jason’s fun loving personalities and to raise significant funds for Cancer Trials Ireland . This organisation provided a great deal of support to Louise and her family throughout her illness and was their chosen charity.

We are thankful to all for giving us the opportunity to create this exciting event, in particular our Keystone sponsors Hibernia REIT plc, Core Capital Limited, Eagle Street Partners, Iconic Offices, Matheson, Glass Bottle and McGrath Group.

See you at the Picnic!

If you cannot attend the event but would like to make a donation to this worthy cause, click here.

Limited tickets available, click here.

Beer and Pizza

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Beer and Pizza session with the Bannon team to share the great work within each of the departments. The Professional Services team are up first. Super to see most of the team back in the office.

Enhanced PART V Obligations

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The Affordable Housing Act 2021 brought about changes to the Part V process.  The most significant change is the requirement for new housing developments granted planning permission after 3rd September 2021, to have a 20% rather than 10% Part V (social and affordable) provision.  Of the increased 20% provision, at least half must be allocated for social housing support.  The remainder can be used for affordable housing which can be in the form of either a purchase or cost rental (or a combination of both).

The over-arching aim of Part V provisions is for the State to capture a portion of the increase in land value resulting from the granting of planning permission for qualifying residential developments. According to the Government’s Housing Agency, the preferred option which should be pursed by local authorities is the acquisition of completed units on the development site, by means of a transfer to the local authority or to an Approved Housing Body (AHB). The net monetary value (NMV) obtained by the local authority must be the equivalent of 20% of the difference between the market value of the land on the date on which planning was granted and the existing use value.

For a development site with planning permission and a market value (MV) of €3 million and an existing use value (EUV) of €500,000, the NMV due to the Local Authority will have increased from €250,000 at a 10% obligation to €500,000 at a 20% obligation. Therefore the determination of an appropriate market value has considerably greater significance to the overall costs associated with any proposed scheme of development. Importantly, Section 96(7) of the Planning and Development Act provides that either party can refer the matter of NMV for determination by a Property Arbitrator in the event of disagreement with the Local Authority or their representative. However, any reference to Arbitration needs to be done in a timely manner as the conveyance of completed residential units will be contingent on the Part V issue being resolved.

Niall Brereton BSc MRCIS MSCI is a Registered Valuer and has considerable experience in preparing Part V Valuations on behalf of landowners and developers and negotiating agreements with Local Authorities.

Bannon Retail Pulse Report – April 2022

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We are delighted to share our latest Bannon Retail Pulse. This month we focus on the Food & Beverage Sector where we report on strong take-up and low vacancy across the sector. Our Retail Pulse is updated monthly and all are available on our website bannon.ie.

To view the full report, please click here.

 

Bannon Promotions

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Bannon recently announced two very deserving promotions – Ben Semple to Divisional Director and Eugene Burns to Associate Director.

Ben has played a leading role in the Professional Services Team since Bannon was founded in 2005. Ben specialises in the provision of Valuation, Landlord & Tenant and Development Consultancy services.

Eugene is an integral part of the Property Management Team and leads several high profile management instructions.

Bannon Managing Director Paul Doyle commented “Ben and Eugene each play an important role, with the wider team, in continuing to elevate Bannon’s position in the market by providing a best-in-class service to our clients. These promotions are in acknowledgement of Ben and Eugene’s efforts, professionalism and contributions to Bannon and our clients”.

Tipperary Crystal is now open in Stephens Green Shopping Centre.

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Bannon is delighted to welcome Tipperary Crystal to Stephens Green Shopping Centre.

We wish the team the very best of luck with the opening.

Benefits of Property Management Due Diligence for Investors

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At Bannon we manage over 75 individual commercial assets including Shopping Centres, Retail Parks, Neighbourhood Schemes, Multi Let and Single Let Offices. This represents over 7 million sq.ft of commercial real estate in Ireland, with an estimated value of €2 billion.

Given our involvement and exposure within this industry, we are regularly engaged to assist purchasers with the property management due diligence process associated with large scale property transactions. This process is particularly complex when it comes to the purchase of multi let retail assets.

When concerns are presented, an investor can only then appreciate the importance and benefits of a pre – sale due diligence. It highlights the perils associated with buying an asset and ultimately determines the price they will pay for the asset on closing.

A typical due diligence process will involve several specific fields of expertise, namely: Legal, Tax, Building Surveying, Planning, Sustainability, Property Investment and Management.

Once engaged, Bannon will work closely with the relevant advisors to ensure a thorough review of all property management related topics are analysed. As part of a due diligence process for a commercial property we would typically provide advice concerning the following items;

  • Lease review & creation of a bespoke tenancy schedule suited to our clients’ requirements
  • Rent arrears
  • Service charge arrears
  • Service charge budget & apportionment
  • Benchmarking of service charge budget line items Vs Bannon portfolio
  • Floor area measurement comparison
  • Sinking fund
  • Insurance programme review (Incl. reinstatement cost assessment)
  • Benchmarking of footfall Vs Bannon portfolio (if applicable)
  • Facilities management contract review i.e., cleaning, security, landscaping, PPM (Preventative Property Maintenance) etc.

The list above is dependent on the complexity of the asset in question and can be amended to take account of asset specific variables.

Ordinarily the above information would be readily available from a data room which would be set up by the vendors agent. Once the information is received it takes some time to comprehend and consolidate such a vast quantity of information into a format which is easily understood by both our client and legal representative when negotiating the finer detail on closing of a sale.

In advance of such negotiations, we will equip our client with the findings from the due diligence process, paying particular attention to areas of concern. Common concerns which can arise from a due diligence process include;

  • Apportionment of arrears on closing (both rent & service Charge)
  • Underfunding of the sinking fund
  • Outlining the existing landlord voids – specifically relating to service charge
  • Summarizing concessions given to tenants but not properly documented – This has been common throughout the recent Covid period
  • Outlining agreements with tenants that do not have an executed deed of renunciation
  • Maintenance issues which need to be addressed as a priority

If you are considering an investment in a commercial property, please do not hesitate to reach out to a member of the Bannon Property Management team.

 

Author:                 Eugene Burns, Associate Director, Bannon

Date:                     27th April 2022

 

Completely Retail Marketplace Event

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An early start this morning for our Bannon retail team for the Completely Retail Marketplace event in London. It has been great to meet people in person to discuss our Landlord and Tenant requirements.

ISO 14001:2015 Environmental Management Systems Certification

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Bannon is delighted to receive ISO 14001:2015 Environmental Management Systems certification which will function alongside our existing ISO 9001:2015 Quality Management System for all services provided by Bannon.

This certification is validation of Bannon’s commitment to Environmental Sustainability in the delivery of our property consultancy services that span across retail agency, office agency, professional services, investment, consultancy and property management.

Many thanks to all involved, in particular the newly formed Sustainability Subcommittee, who embraced the challenges of designing and implementing the system. All eyes now turn to the future and the implementation of a range of innovative initiatives.

 

Niche Area of Supermarket/Convenience Going Concern Valuation

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Property valuations tend to be of the ‘bricks and mortar’ variety, i.e. producing a valuation of the physical building either with vacant possession or based on an investment income stream.  In addition to these traditional valuations, the Bannon team regularly undertake specialised valuations of a trading going concern.  This involves valuing not only the building but also accounting for the value attributable to the business carried on therein.  It is a niche aspect of valuation, whereby we, the valuer are required to understand both the property and the business to arrive at a value based upon the marriage of both elements.

Where traditional property valuations are often based upon comparison transactions including lettings and sales which set benchmarks against which a valuation is assessed, the valuation of a going concern is much more nuanced.  One of the main impediments to such valuations is that going concerns are rarely openly traded in the commercial markets and therefore tangible comparison evidence is often scarce or completely lacking.

Even were there to be a bountiful supply of comparison transactions, the intricacies of the valuation of a going concern involves a much deeper understanding of the general industry in which the business operates, as well the mechanics of the subject business.

Bannon has carried out many valuations of convenience store and supermarket going concerns for many years.  Based on long-established relationships with retail clients, we have a deep understanding of how these businesses function and the key criteria that impact their trading performance.  This understanding provides Bannon with the insight to analyse the trading profit and loss accounts of the business.  We understand the profitability of the operation based on establishing a sustainable EBITDAR (Net Earnings) position and the route and cost required to achieve that position.

In forming a view on a stabilised Net Earnings position, we review a number of items including but not limited to the following:

  • Turnover history to interpret the strength of the business.
  • Operating costs of the business making an assessment as to savings that could be accrued, or conversely where costs should be increased.
  • Costs that directly relate to the daily operation of the business.
  • Costs that are not intrinsic to the day-to-day operation of the business.   
  • Any capital expenditure that has been invested or is proposed and the likely impact that this will have on the strength of turnover or costs savings.
  • Assess competition – existing and proposed.

After concluding a stabilised Earnings position we then conclude a capitalised value, only after taking account of required capital expenditure and acquisition costs.

A further point that is becoming increasingly important in assessing a business are the ‘Green’ credentials of the building and the operation.  Those businesses that have embraced ESG and invested accordingly should see benefits in more efficient operations resulting in cost savings.   Businesses that have been slow to move with the times will experience higher costs that will impact the bottom line and reduce operating margins.

The valuation of supermarket going concerns is a highly niche aspect of commercial valuation practice.   As market leaders in the retail sector, Bannon is uniquely placed to carry-out such valuations.  Contact Ben Semple, Divisional Director and Registered Valuer from the Bannon Valuation Team for more information.

Email:  bsemple@bannon.ie

Dated:  13th April 2022

 

 

Investment Market Commentary

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While it is still too soon to quantify the impact of the geo-political and macroeconomic backdrop on the Irish commercial property market, based on the Q1 figures and advanced pipeline transactions we anticipate that 2022 will still become one of only three years to record a turnover in excess of €5bn.

To view the full report, click here.

Pret A Manger to expand into Ireland creating 500 jobs

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Around 500 jobs are to be created across the island of Ireland by coffee and sandwich chain Pret A Manger.

The company is to open up to 20 shops within the next decade, as part of its entrance into the Irish market.

The outlets in the Republic and Northern Ireland will be rolled out by Carebrook Partnership Limited under a franchise arrangement.

The first shop is set to open on Dawson Street in Dublin this summer, creating 25 jobs.

“Setting up shop in the Republic of Ireland and Northern Ireland has been our plan for a long time, and we’re thrilled that we’re finally able to make it happen,” said Pano Christou, Chief Executive Officer at Pret A Manger.

“There has long been demand from our neighbours on the island of Ireland to bring Pret’s freshly prepared food and organic coffee, and now with the backing of Carebrook Partnership Ltd we’re able to do so.”

“We look forward to making this partnership a success.”

Carebrook Partnership Ltd has worked with Pret for three decades and runs many of its stores in London where it is a common sight on city centre streets.

Carebrook is majority owned by UK and US food sector veteran, Gerard Loughran, who grew up in Nenagh, Co Tipperary.

Ray McNamara from Dublin, who has 25 years’ experience in the Irish food industry and owns Ann’s Bakery is also a minority shareholder.

“We’ve been working with Pret for over three decades, ever since they arrived in London,” said Gerard Loughran, CEO, Carebrook Partnership Ltd.

“Having grown up in Tipperary, and with more than two decades of experience in the hospitality and food industry, I’ve always wanted to bring Pret to Ireland and Northern Ireland, so I’m delighted that this will soon become a reality alongside my co-owner Ray, who has great connections and links to the food sector in Dublin with 25 years’ experience.”

“We look forward to welcoming our new customers, soon.”

Last year Pret announced that it would aim to double the size of the business within five years, including launching into five new markets by the end of 2023.

Pret is owned by investment group JAB and founder Sinclair Beecham.

It currently has shops in the United Kingdom, United States, Hong Kong, France, Dubai, Switzerland, Brussels, Singapore and Germany.

Article by RTE

EV Charging Infrastructure Strategy 2022-2025.

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Very positive news from the Department of Transport with the publication of Ireland’s first EV Charging Infrastructure Strategy 2022-2025.

We have been swamped with noise around EV charging over the last number of years. Bannon has installed charging units at a number of retail centres across the country, with more in the pipeline. Whilst there is clearly a need nationwide for a charging infrastructure to accompany the push to electrify the national fleet, the planning and installation of this infrastructure needs to be informed by the rational analysis of reliable data.

At Bannon we have access to an enormous database of nationwide data about how people use cars to access shopping destinations and where they come from, with over 100 million customer visits generated by the portfolio annually. This data can be used to establish which retail schemes need more charging points to satisfy their customer requirements, which schemes can be used as charging stop over points for people on longer journeys and which journeys could be redirected to public transport, cycling or walking. Using data to ensure that resources are deployed where they will be of most benefit is at the core of sustainability.

The Department of Transport is inviting input on the draft strategy to be sent to evinfrastructure@transport.gov.ie

Electric Vehicle Charging Infrastructure Strategy 2022-2025 PDF

 

Author:                 Cillian O’Reilly, Surveyor, Sustainability Manager, Bannon

Date:                     7th April 2022

 

Retail Parks Prove to be Resilient During Covid

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Looking back over the past decade the retail property market has experienced a tumultuous time.  Recession following a boom, followed by a resurgence, then the impact of Brexit, Covid, the move to more on-line shopping, and more recently the war in Ukraine.  Retailers and the retail property market have been the hardest hit during this period, and it may be some time before the market stabilises. However, one sector within the retail property market has outperformed in the last 3 years.

Retail Parks have come through the past two years’ experience in an even a better position that before.  The sector has been the beneficiary of multiple factors.

The closure of other retail outlets funnelled consumer spend into retail warehousing parks as the only outlet for frustrated shoppers. This was helped by the nature of retail warehouse parks versus enclosed shopping centres. As large boxes with plenty of space for social distancing, they offer surface outdoor parking and ease of access for click and collect purchases.

What also helped was the focus on the products that are typically sold in retail parks. There was a perfect storm of an increase in home improvements and outdoor activities being a major focus for Covid bound customers acquiring items such as:

  • DIY
  • furniture and soft furnishings
  • the need for new electronics to assist with remote working and learning
  • an increase in pet ownership
  • toys for housebound kids
  • a boom in healthy pursuits driving sales in sports/leisure stores.

This all led customers to their local retail park.

The Bannon Retail Team has seen this resurgence across our extensive portfolio of Retail Parks that we lease and manage. Car numbers in retail parks are up considerably when compared to 2019 numbers, which is a different story when compared to the reduction in footfall that is being experienced in enclosed shopping centre and city centre environments. 

Vacancy rates in retail parks were already low in Q1, 2020.  The acceleration of transactions during and after the third Covid lockdown has pushed vacancy rates to a very low percentage.  Schemes such as Limerick One Shopping Park and The Retail Park Liffey Valley currently have vacancy rates at a long-term low.

New to market retailers and those slow to expand pre-Covid are now seeking increased representation in the better parks in Dublin and provincial locations.  This supply and demand dynamic may encourage owners of retail warehouse parks to start considering expanding their schemes to cater for this renewed demand.

Retailers keen for further expansion include Dutch furniture retailer JYSK, global sports brand Decathlon, Next Home, Homesense, Home Store + More, Party City and EZ Living Furniture/Interiors to name a few.  This sector of the retail market will be keeping us busy for the foreseeable future.  

Author:                 James Quinlan, Director, Bannon

Date:                     6th April 2022

At a Glance: Office Market Q1 2022

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Dublin office market take up has exceeded 490,000 sq.ft. across 47 transactions this quarter. Whilst this is a positive start to the year when compared to Q1 2021, it does represent a 54% decrease on Q1 2020 (pre-covid) figures. However, we would note that there is over 1,200,000 sq.ft. of office accommodation currently reserved and a number of unfulfilled requirements in the market, which should result in a more robust Q2/Q3 in terms of take up.

At a Glance: Investment Market Q1 2022

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A steady start to 2022 for Irelands Commercial Property Market despite the geopolitical backdrop posting a Q1 turnover of €759.4m beating both the Q1 2019 and Q1 2020 figures.

Bannon Launches Verified Supplier System

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Bannon is delighted to announce that it has entered into a partnership with Site Passport to establish the Bannon Verified Supplier platform. Site Passport transforms the way companies access, evaluate, monitor and analyse their supply chain. They do this by providing smarter, integrated and automated solutions that deliver increased competitiveness, enhanced reputation and reduced risk.

The Bannon Verified Supplier platform is a bespoke online resource designed in conjunction with Site Passport to ensure that all contractors working on Bannon managed sites meet the highest levels of standards. In order to qualify as a Bannon Verified Supplier, our partners must meet the following minimum criteria:

  • Must be of good financial standing
  • Are tax compliant
  • Have valid insurance cover in line industry levels
  • Have robust Health and Safety policies and procedures
  • Have active environmental and sustainability policies that are in line with Bannon sustainability objectives
  • Meet corporate and professional standard requirements
  • Meet with Bannon ESG and corporate governance objectives
  • Comply with all employer equality legislation

To date we have verified over 80 contractors through the process. The verifying process ensures that only the most proactive and efficient contractors are engaged on Bannon managed sites. We insist that all our contractors are committed to meeting sustainability and environmental goals in line with our company ethos. All contractors must demonstrate that they have a proactive sustainability policy that is being adhered to and actively monitored We also encourage contractors to use the most efficient and environmentally friendly products available to the market.

As market leaders, Bannon manages over 75 commercial assets including Shopping Centres, Retail Parks and Offices with a combined footfall of over 100 million visitors per annum. Therefore, we put a premium on ensuring that all contractors who work on Bannon managed sites are industry leaders who like us, strive to meet the highest of standards. This is imperative to our role as managing agents. Bannon is committed to ensuring that all assets under our management are safe, clean and a welcoming environment for all users. This is achieved by partnering with contractors who share our values and are committed to our best-in-class approach. The Bannon Verified Supplier platform is another tool to help Bannon achieve this.

Author:                 William Lambe, Divisional Director, Bannon

Date:                     1st April 2022

Major changes to Leaving Cert will see students sit some exams in fifth year

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Major reform of the Leaving Cert is being planned from 2024 onwards which will include spreading project work and exams over fifth and sixth year.

The move aims to reduce student stress levels around the traditional written exams and introduce teacher-based assessment for projects and other course components.

Minister for Education Norma Foley is keen to proceed with reforms which would see students entering senior cycle in September 2023 sitting Paper One in English and Irish at the end of fifth year.

Over several years, 60 per cent of marks for all Leaving Cert subjects will be based on written exams and 40 per cent on additional assessment components such as project work, orals or practicals.

Teacher-based assessment of these additional components will be externally moderated by the State Examinations Commission.

The announcement on Tuesday follows a four-year review of the senior cycle by the National Council for Curriculum and Assessment (NCCA), based on consultations with students, teachers, parents and industry.

The review found while there was broad agreement exams should remain, it proposed giving greater weight to continual assessment, projects or other course components over a two- or three-year period.

On foot of Tuesday’s announcement, a selection of schools will shortly be invited to become pilot schools and participate at an early stage in revised curriculum and assessment arrangements.

Among the changes announced are:

* The introduction of two new subjects – drama, film and theatre studies; and climate action and sustainable development – which will be ready for students in pilot schools starting fifth year in 2024;

* An initial tranche of new and revised subjects will be available in pilot schools from September 2024, when students entering fifth year will study updated subject curricula, with updated assessment models in chemistry, physics, biology and business;

* Future oral exams and the music practical performance will take place during the first week of the Easter break of sixth year, as is the case this year;

* Leaving Certificate Applied (LCA) students will have improved access to maths and foreign languages from September 2022;

* A new qualification will be introduced at level one and two on the National Qualification framework to provide an appropriate level of assessment to some students with special educational needs, building on the equivalent programme at Junior Cycle level;

* Access for all students to a revised transition year programme will be encouraged.

Under Ms Foley’s plans, the NCCA and the State Examinations Commission will develop, in consultation with education partners, how an externally moderated, school-based form of assessment would operate.

However, teachers’ unions on Tuesday moved quickly to voice their opposition to any plan that involves members assessing their own students.

Teachers’ Union of Ireland (TUI) general secretary Michael Gillespie said: “Our members are fundamentally opposed to assessing their own students for State certificate purposes and therefore external assessment and State certification – which retain significant public trust – are essential for all written examinations and all additional components of assessment.”

Association of Secondary Teachers’ Ireland (ASTI) president Eamon Dennehy said certification in State exams must be “entirely externally assessed”.

“This must be retained in all aspects of the development of the Leaving Cert. It is vital that the integrity of the state exams system is maintained,” he said.

Ms Foley said the redeveloped senior cycle aims to deliver “equity and excellence for all”.

“This programme is timely and ambitious – we must not rush, but cannot delay. The timing I have set out will ensure that students will feel the benefits at the earliest possible time, with notice of these in advance.”

She said the reforms will reduce the pressure on students that comes from final assessments based primarily on exams.

“We will move to a model that uses other forms of assessment, over a less concentrated time period, in line with international best practice,” she said.

Ms Foley said these changes will enable the education system to maintain its high standards.

“Our current system has many strengths. But we know that it can be improved, to better support our students, to reduce pressure while maintaining standards, to keep pace with the changes in practices internationally and to meet the needs and expectations of our students and of our society in preparing our young people for the world ahead,” she added.

Article by The Irish Times.

Adamstown community retail portfolio guiding at €1.9m

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Agent Bannon is guiding a price of €1.9 million for a community retail investment opportunity comprising four retail units and a standalone creche at Adamstown in west Dublin.

The units, which are below a modern residential development called the Sentinel Building, are occupied by Londis (with a guarantee from parent company BWG), Mizzoni’s Pizza and Pamper Yourself, together with one small vacant unit. The creche is operated by Giraffe Childcare. All of the units are presented in excellent condition throughout and benefit from prominent road frontage.

The annual passing rent is currently €163,375 with substantial reversionary potential. The asking price offers the prospective purchaser an attractive initial yield of 7.84 per cent, rising to a potential double-digit yield on the letting of the vacant unit and the settlement of the outstanding Londis and creche rent reviews. The properties extend to a total floor area of 15,264sq ft and have a weighted average unexpired lease term (Wault) to break of 6.43 years and a Wault to lease expiry of 8.72 years.

The subject units are in the southeast of Adamstown and 750m from Adamstown train station. The surrounding area is predominantly in residential use with a mix of high- and low-density housing. Current population estimates suggest a resident population of about 5,000 and once fully complete this is projected to be 25,000 people.

Ros Tierney of Bannon expects to see “significant interest from investors seeking a high-profile grocery and necessity portfolio with value-add potential through asset management”.

Article by The Irish Times.

Retail Sales

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The CSO (Central Statistics Office Ireland) reported retail sales values for all business increased 4.3% on pre-pandemic levels. Taking a deeper dive this figure includes bars which remain 28.45% below 2019 data. When bars and motor trade are excluded, retail sales values have jumped 11.6% when compared to 2019 and 2020.

This positive performance is despite the level of overseas travelers to Ireland remaining 35% below 2019 and 2020 figures. The full return of tourists to Ireland will spell further good news for the retail sector.

Retail Boom Continues

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Despite the negative narrative in the press recently the Retail Sales figures released by the CSO paint a very positive picture of the sector. Overall the value of retail sales (excluding cars & bars) were up 11.6% on February 2019. The only red figures on the index are bars, department stores and books, all other 19 indicators are positive versus February ’19 & ’20. The real stand out number is Clothing & Footwear which was almost 1/3 higher than in February 2019.

These figures do not reflect the downturn in Consumer Sentiment that has been recorded since the war in Ukraine hit the headlines and in the past the Irish Consumer has proven very sensitive to macro economic events as evidenced in the Summer of 2016 after the Brexit vote. It will be interesting to see how the CSO data is portrayed in the press.

Bannon Retail Pulse Report – March 2022

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We have pleasure in enclosing The Bannon Retail Pulse Report for March 2022. March witnessed further improvement in footfall trends, reflecting the lifting of restrictions earlier in the year. This will improve further as we can now look forward to an increase in tourist numbers in the months ahead. Transactional activity was extremely busy in Q1 and will continue into Q2.

For retail enquiries and intelligence, please contact any of the team.

To view the full report, please click here.

A big welcome to this year’s Interns

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A big welcome to this year’s interns from everyone at Bannon (including our office dog – Lily).

Mark Hayden, Stephen Keegan, Alison O’Gorman, Brian Morton, Dwane Martin.

High-end UK retailer Flannels to open at Blanchardstown Centre

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Premium fashion group Flannels has signed a deal for its second Dublin store.

Having committed earlier this year to occupy half the retail space at the Clerys Quarter on O’Connell Street, the luxury retailer is to open for business at the Blanchardstown Centre.

Flannels, which is part of Mike Ashley’s Frasers Group, will occupy the ground floor of the former Debenhams unit. At 45,000sq ft, the space will be the larger of the two outlets committed to by the retailer in the Irish market to date. Flannels’ premises at the redeveloped Clerys store will extend to 30,000sq ft.

Commenting on the opening of the latest store, a spokesperson for Frasers Group said: “We’re excited to open Flannels in Blanchardstown and bring a world-class shopping experience to a new destination. Our ambitious expansion plans mark a pivotal moment for the business, and we’re pleased to be opening in Blanchardstown as part of our next cohort of store openings in Ireland.”

‘Ongoing strategy’

Pat Nash, managing director at the west Dublin retail scheme’s asset manager Falcon AM, added: “Flannels’ commitment to a new lease in Blanchardstown Centre is a huge endorsement of the scheme and follows the completion of a major €17 million mall refurbishment. This is in line with our ongoing strategy to strengthen and reposition the asset . We are excited to be welcoming new retailers to the centre and indeed the Irish market during these unpredictable times.”

Falcon AM made the decision to split the Debenhams’ unit, which comprises more than 100,000sq ft in its entirety, to meet with current retailer demand according to the firm’s leasing director, Sharon Walsh. Ms Walsh said that a further announcement will be made in relation to the upper level of Debenhams’ former premises in the coming weeks.

BNP Paribas Real Estate and Bannon are the joint leasing agents for the Blanchardstown Centre.

Article by The Irish Times

MIPIM 2022

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No sun (glasses obligatory) but plenty of business to be done at this years MIPIM 2022 for the Bannon team…. Call if you’re around and would like a “coffee”.

 

MIPIM 2022

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Great to get back to MIPIM 2022 (15-18th March) for Neil Bannon and Roderick Nowlan.
Please feel free to get in touch if you would like to arrange a meeting.

Cycle for Ukraine Fundraiser

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Best of luck to the Square management team, security, facilities and all the store staff with the “Cycle for Ukraine” fundraiser. The fundraiser will run today and tomorrow in the Centre Mall, from 11.00am – 6.00pm.

All funds raised will go to the Irish Red Cross to help those affected get food, medicine, shelter and water. Donations will also help those displaced by the conflict.

Cash donations are welcome, however if you cannot make it in person, you can donate online here or by scanning the QR Code in the image attached.

Happy International Women’s Day

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Happy International Women’s Day.

To mark the day and The Square’s Club Together initiative, please watch the video below that celebrates amazing “Strong Women” in the local community.

Tallaght is blessed to have so many influential role models in the community. Their amazing achievements inspire the younger generations and help create a thriving society where equality duly prevails.

We are very fortunate to work with some amazing women in Bannon and across our wider portfolio. Thank you for all your help and support.

Sustainability Blog

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Urban Transportation Hubs. A snazzy name for a car park or a way of rethinking how we move about our cities and towns?

There is an opportunity to reimagine the role of car parks. Giving over space within the facilities to accommodate secure bike parking, charging stations for electric bikes and scooters, dedicated spaces for car share schemes and a range of EV charging options for those that need rapid charging, to the owner who just needs a slow charge overnight can turn these buildings into true transport hubs.

They can form a central part of a transport interchange where customers pivot from one form of transport to another pre-booking their required option on a dedicated app. Arrive on your bike, park it securely for the day and take out pre-booked EV charge appropriately to make a trip to Galway. Arrive on a shared scooter and rent out an electric bike.

Reusing and refocussing existing infrastructure intelligently is ultimately the key to sustainability, why not start with car parks?

Blog post written by Cillian O’Reilly, our Sustainability Manager. You can contact Cillian by email on coreilly@bannon.ie

The Strength of the Irish Consumer

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The strength of the Irish Consumer was further emphasised this week with the CSO reporting a 2.0% annual increase in weekly earnings to €864.51 for Q4 2021. When compared to pre-pandemic levels this increase jumps to 9.9%.

The CSO Labour Force Survey also reported a year-on-year increase in the Labour Force (8.9%) along with a decrease in unemployment to 5.3% which resulted in record employment of 2.5 million people.

The result of these two factors can only be positive for the Irish retail market.

Author:                 Cillian O’Reilly, Surveyor, Sustainability Manager, Bannon

Date:                     2nd March 2022

The Obsession with the Negative Narrative

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It is fascinating how the Irish media can find the negative in any piece of data. Today’s Irish Times has a headline proclaiming that retail sales are down 1.5%, a downbeat message that seems at odd with the economy at large and our own data. The comparison is between retail sales in January and December. In reality there are very few years when retail sales in January reach 98.5% of those achieved in December given when Christmas falls!

Not worthy of inclusion in the article is that retail sales excl. cars in January were 7% higher than in in pre COVID January 2020! They are 17% higher than January last year but the comparison with COVID impact periods would be as misleading as the IT article. It shows the benefits for investors of real data and expert analysis and the negative narrative does create opportunities for the well informed astute investor. For more information contact Consultancy@bannon.ie

Author:                 Neil Bannon, Executive Chairman, Bannon

Date:                     2nd March 2022

100 Miles Mater Challenge

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The 100 miles in a Month Fundraiser has officially come to a bittersweet end. It has been an incredibly tough challenge, mainly due to the weather conditions but we have thoroughly enjoyed every step of the way. Thanks to everyone who supported us and donated to the foundation.
If you haven’t donated but would like to, click here.

Bannon Retail Pulse February 2022

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Bannon are delighted to bring you our February Retail Pulse. As we look towards a complete removal of COVID restrictions on Monday next what does our latest report tell us about how the market is likely to perform over the coming months?

To view the full report, please click here.

 

 

 

100 Miles Mater Challenge

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Thank you to everyone who has supported us in our 100 Miles in a Month fundraiser for The Mater Foundation. It’s been a tough challenge but even storm Eunice couldn’t stop our team and with only one week left to go, we can all agree that it has been an incredible experience so far.

There is still time to donate, which would be hugely appreciated.

To support us, click here.

Bannon are Hiring

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Bannon is seeking a Senior Property Manager/ Associate Director – Property Management Department, Associate Director – Investment Department and Agency Surveyor – Retail Department based in Dublin’s City Centre.

Check out all the positions here.

Central Bank of Ireland’s Quarterly Financial Accounts

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The strength and resilience of the Irish consumer has shone through once again in the Central Bank of Ireland’s Quarterly Financial Accounts. The accounts show household net worth rose by 9% in the year to Q3 2021 and now equates to €188,457 per capita. In the same period household debt dropped by 2%. As a result, Ireland’s household debt has fallen to 99.7% of disposable income, down from 106% one year ago and below 100% for the first time since the series began in 2002. Ireland’s household debt to disposable income ratio is now the seventh highest across the euro area.

Retail and the art of the “seanchaí”

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There is a word in the Irish language which describes a storyteller. It is “seanchaí”. The author, Frank Rose, has explored storytelling and its effect on human behaviour and decision making in his recently released book “The Sea We Swim In” published by Random House. One of the themes of his book is the role of storytelling in the marketing of products. Telling the story of a product’s journey rather than simply including it in a catalogue, results in increased sales.

This theory is based on the belief that consumers make a purchasing choice based on available product information. When invested in the product’s origin story and journey, they are persuaded to purchase in greater quantities and at a higher price point. Through our retail clients, we see increasing consumer queries regarding the provenance of the goods they are buying and the story of the journey the products have taken to arrive on our shelves.

In recent LinkedIn articles we have provided updates on the great number of retail occupiers who are refurbishing and redesigning the space that they occupy within our centres. In these refurbishments there has been a shift towards lifestyle designs. This allows the retail space to enable and promote the story of the products. Consumers can handle and explore in-store before a potential purchase or online order.

Post lockdown, we have worked with over 20 retailers who have invested in store refits across our portfolio of 50 shopping centres and retail parks. In our recent Retail Pulse Jan 22 / Q4 2021, sales in shopping centres for December 2021 was 6% above the same period in 2019. This shows that there is an increased amount of business available to support this investment in stores.

Consumer behaviour regarding the story, provenance and origin of retail products is also matched by investors’ Environmental Social and Governance (ESG) requirements regarding their property portfolio. In future updates we will highlight case studies on how our current retail stock is being refurbished and redesigned to include sustainability and environmental factors. This may in turn be an opportunity to evolve and harness the consumer movement towards a more immersive retail story telling retail journey.

For now, we at Bannon will continue to be the seanchaí for the Retail Sector in Ireland!

Author:                 Peter Nicklin, Property Management Surveyor, Bannon

Date:                     14th February 2022

 

LEGO to open first Irish store in Dublin this summer

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LEGO is to open its first ever store in Ireland with the new store set to open in Dublin’s Grafton Street this summer.

The new Dublin LEGO store will feature the “Retailtainment” concept which blends physical and digital experiences that allow shoppers to immerse themselves in the LEGO brick, as well as create personalised products.

About 10 to 15 jobs will be created when the new store opens.

Simone Sweeney, Vice President of Global LEGO Retail Development, said the company had been looking for the perfect site in Dublin, so it was very excited when the opportunity came about to open on Grafton Street.

“The new LEGO Store will be amongst some of the biggest and best brands in Dublin, in a shopping district loved by many local families and visitors alike,” Ms Sweeney said.

She said that Dublin has been part of LEGO Retail’s expansion strategy for many years given the existing huge number of LEGO Fans in Ireland and the international customers typically found in the city.

“The new LEGO Store in Dublin will allow builders of all ages to be inspired by endless play possibilities and for new builders to welcome them into a new exciting journey of discovery into the LEGO universe,” she added.

The new LEGO store will be housed at number 41 Grafton Street – the former Topman store – in a building which is owned by Irish Life Investment Managers.

The deal was negotiated on behalf of Irish Life Investment Managers by Savills Ireland and Bannon.

The LEGO Group was founded in Denmark in 1932 by Ole Kirk Kristiansen and its name derived from the two Danish words LEg GOdt, which mean “Play Well”.

Today, the LEGO Group remains a family-owned company headquartered in Billund in Denmark and its products are now sold in more than 140 countries worldwide.

Article by RTE News 

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