Neil Bannon joined Newstalk Mandy Johnston on Down to Business on Saturday to discuss the trend that retail property prices in the provincial retail sector seem to be increasing in value.
For the full discussion, please click here.
There was a real buzz in Dungarvan Shopping Centre this past Saturday, celebrating 20 years in business. The event was a huge success, featuring a variety of entertainment options, including a DJ, performers, and numerous prizes throughout the day. It was a day filled with festivities marking the occasion and we wish them many more successful years!
Opened in 2005, Quayside Shopping Centre Sligo is strategically located in the heart of Sligo Town, making it a highly accessible and convenient destination for over 20,000 local residents and an upward-trending influx of seasonal visitors. The centre benefits from its prime position, just a short distance from key attractions like Strandhill Beach and transport links such as Sligo MacDiarmada train station.
Recognised for its excellence in retail and community contribution for the sixth year in a row, Quayside Shopping Centre earned the prestigious title of All-Ireland All-Star Shopping Centre of the Year 2023-2024. This accolade highlights the centre’s dedication to delivering a premier shopping experience, exceptional customer service, and fostering strong connections within the community. This award cements Quayside Shopping Centre’s standing as a top-tier destination for retail and leisure in the region.
Spanning 140,000 sq. ft., the centre houses a diverse range of retail units, including fashion outlets, homeware offerings, and speciality shops. A variety of food and beverage options are also on offer, enhancing the visitor experience. Prioritising convenience, the centre offers ample parking facilities, including 420 spaces within its multistorey car park.
Quayside Shopping Centre features a well-curated mix of international, national, and local occupiers, anchored by key brands such as TK Maxx, Next, River Island, Specsavers, Insomnia & Lifestyle Sports.
Celebrating the achievement of two team members, Darragh Kildea and Daniel Murphy, for successfully passing their APC Final Assessment to become Chartered Surveyors and members of the SCSI – Society of Chartered Surveyors Ireland and RICS!
Our latest monthly Retail Pulse has now gone live. In this publication our retail leasing team review recent openings/signings in the run up to a busy Christmas period.
Separately in our “Expert Insight” section Neil Bannon looks at the evolution of lease agreements and the frustration among some European headquartered retailers with the complexity of Irish leases. In general “less is more”, however in the context of Irish leases the inverse would appear to be the case.
Full report available here.
The Circuit Court decision last week to halve the rent for Bewley’s Café on Grafton Street, Dublin 2, raised a few eyebrows in property circles. The decision certainly comes down on the tenant’s side of the argument, and aspects of the case are indicators of a change in Irish retail markets.
Firstly, it’s a reminder that on expiry of a lease, a tenant, in possession for five years, can go to the courts to set the terms of a new lease, instead of negotiating with the landlord. Notably, in this process, the tenant can dictate the length of the new lease – anything from one year to 25 years – and after one year they can go back to the courts and repeat the process.
The former would present a major headache for any landlord in managing their asset, and reduces the value of their investment. That’s why the threat of a “court lease” is a powerful one in concluding negotiations. It’s not surprising that court leases are often seen where there is a difficult relationship between landlord and tenant.
The tenant can dictate the length of the new lease and after one year they can go back to the courts and repeat the process
In a newly awarded court lease, all of the terms from the previous lease – for example repairing covenants – will be the same, with the exception of the term (dictated by the tenant), the upward-only rent reviews (now banished) and the new rent.
There is a risk for both tenants and landlords in going to the courts as, while judges will listen to both sides of the argument, they are not property experts and decisions can be surprising.
It’s interesting that Bewley’s Café opted for a short five-year term, and that’s a symptom of the changing market. For decades, leasehold interests on Grafton Street could be sold to other tenants for substantial premiums, or “key money”.
However, the introduction of upwards and downwards rent reviews means the days when long leases became valuable are gone.
Indeed, it is this flexibility which is now becoming key in Irish retailing. While Bewley’s Café will hopefully be trading for another hundred years, there is an acceptance among retailers, particularly in the fashion sector, that they may not be in vogue in 10 years, and so they are choosing shorter leases.
I spoke with retail property expert Neil Bannon, chairman at Bannon, and he confirmed that new leases are now typically for seven years. This usually involves the tenant repudiating their rights to renew the lease on expiry, which also improves flexibility for the landlord.
This flexibility is of increasing importance for landlords too
Mr Bannon sees this flexibility as a positive move and said that “we are moving closer to the European model”.
This flexibility is of increasing importance for landlords too, he told me.
“Consumers demand excitement and change, so landlords need the ability to actively manage their portfolios.”
This increasing flexibility has improved Grafton Street, too, he said, with a greater variety of smaller European retailers, rather than a copy of a typical UK High Street.
This era of shorter leases increases the likelihood of rents rising, Mr Bannon said. “There is less emphasis in the market on the rent review cycle, and more on new lettings and change.”
He also pointed out that rents quoted in the market now are “net effective rents”, which take account of any rent-free period granted. There has been an ”artificial softening” in rents, since pre-Covid, when “headline rents” ignored tenant incentives. The rents quoted now are “more honest”, he concluded.
Our Executive Chairman Neil Bannon is delighted to have the opportunity to address delegates at today’s SCSI PMFM conference. Neil’s presentation focuses on the longer term trends which impact the commercial real estate sector.
It’s fantastic to see KIKO MILANO open their doors on 2 Henry Street this morning. This one has been a while in the making and we at Bannon are proud to deliver this retail first to Ireland on behalf of our clients Irish Life Investment Managers.
Italian cosmetic giant KIKO Milano was founded by Antonio Percassi in 1997 and operate more than 1,000 standalone stores in 63 in countries around the world.
The opening is another positive testament for Henry Street, and Kiko join Lovisa Pty Ltd in choosing Henry Street as their first location for Irish expansion in 2024.
It was a pleasure working with Tom Pope at Lightlease who acted on behalf of KIKO Milano.
For remaining limited leasing opportunities owned by Irish Life Investment Managers on Henry Street please contact Jennifer Mulholland or James Quinlan.
The Bannon team had a wonderful time at the 2024 Nexus Ball on Thursday evening held by the SCSI – Society of Chartered Surveyors Ireland in the Radisson Blu, Golden Lane, Dublin.
A great night of networking with fellow future leaders of the property industry and we are already looking forward to the next one!
Great to see the latest additions to The Crossings @ Adamstown, where Belfry & Co Café and ABC Gyms have officially opened their doors. These new openings will provide the area with a range of options for fitness, dining and coffee.
They join Dublin Bay Vets, THE GRAFTON BARBER, Tesco Ireland and Aldi Ireland who are open and trading with further openings to come soon. In an area experiencing such rapid residential growth, these openings are crucial in establishing a vibrant town centre for the Adamstown community.
For further enquiries, please contact Darren Peavoy or Mark Hayden.
