Fantastic to see the new Vila store now open at Athlone Town Centre.
It was a pleasure to work with our clients Alanis Capital to deliver this letting.
Further exciting new additions in the coming weeks and months ahead.
Bannon’s latest monthly Retail Pulse has now gone live. In this publication Neil Bannon shares some insights on what impact significant new housing supply will have on the retail sector.
To view the full report, please click here.
Environmental, Sustainable & Governance (ESG) requirements for buildings are becoming of increasing importance to both investors and occupiers for buildings. There is no doubt that ESG will become an increasingly prevalent element within the commercial real estate (CRE) landscape, becoming an important driver of asset value. This means current owners will be facing important considerations. How do you attract good quality occupiers, achieve strong rents and ensure a competitive market of buyers for your asset at exit. ESG-led objectives are becoming increasingly commonplace in investment and fund criteria for institutional real estate owners. As these owners are significant sources of capital in CRE markets a likely result will be a somewhat forced divestment from ‘brown’ assets (non-ESG compliant assets) and a channelling of capital towards ‘green’ (ESG compliant) assets.
The market is not balanced, green assets in Ireland are typically buildings constructed or extensively refurbished after the 2014 Building Regulations came into play. We estimate that the green market comprises less than 15% of Dublin’s office stock, with the majority of this space located in Dublin 2 and Sandyford, the prime office locations. With multiple players competing for a limited supply of stock and available capital being funnelled into this small sector an expectation is prices will be driven up by competitive bidding in both the investor and occupier markets. The net effect of these events will be an increase in asset value through growth income complimented by strong occupier covenants and yield compression.
By contrast, we expect a shift in the brown asset market. Company mandates or client requirements will oblige some occupiers to occupy green buildings, seeing the demand for brown space shrink and the market becoming increasingly oversupplied. The pressures resulting from falling demand and increased void costs, will create a lower rent environment. An exit of institutional grade investors will see the demand drop for these buildings with ESG rules preventing purchase. The remaining investors will have to consider the cost and value associated with bringing an asset into the green market. While the market for this in prime locations may be viable, there are greater challenges for suburban/out of centre locations where the end rental value that can be achieved may not support viability of refurbishment.
Rescuing these potentially stranded buildings represents an opportunity for investors and developers and Bannon working with our sustainability business Evia are available to provide technical insights to ESG building upgrades. Feel free to reach out to discuss.
Author: George Colyer, Surveyor, Bannon
Date: 9th June 2023
The Irish consumer market continues to showcase its strength and resilience. According to the latest report by CSO unemployment has hit a record low of 3.8%, while weekly earnings have reached a new high of €923.48.
This remarkable achievement is even more significant when considering that seasonally adjusted unemployment is now 50% lower than its peak during the Covid pandemic two years ago. Furthermore, the Irish labour force has surpassed 2.7 million for the first time in recorded history, and average weekly earnings are 20% higher than pre-Covid levels. With such positive indicators, the outlook for the Irish retail market is incredibly promising.
Celebrating the beginning of PRIDE Month in the office this morning with these delicious cupcakes by The Cupcake Store 🌈
A month to raise awareness, promote inclusiveness, and show support for our LGBTQ+ friends, colleagues, and family members.
The Covid-19 Pandemic has led to a paradigm shift in the traditional approach to office-based work. Following the initial ‘work from home’ requirements during the Pandemic, many businesses have since adopted alternative working models away from the traditional ‘in the office at your desk’ to models such as shifting staff to full work from home, flexible working options and hybrid working models.
The widespread shift to more flexible and agile working models has moved the concept of ‘work’ from a physical place to an activity. The net effect of this does not mitigate the need for a physical office, rather it changes the role and function the office plays in the business and how the space is utilised to meet staff working habits and models and drive business goals. While the full effect of Covid-19 on working models is yet to be seen, the consensus of many businesses and organisations has been to adopt a form of hybrid working to give staff more flexibility and that this is required in order to maintain and attract talent.
Hybrid working models will not necessarily impact an office development’s occupational capacity, rather it allows the building to attract occupiers with larger workforces. For example, if a development with a capacity for 1,000 workers is occupied by a business that implements a 50/50 split between WFH and office, the scheme can, in theory support an occupier with a 2,000 strong workforce. In practice this may be less as businesses will require full attendance by teams at different times and we have already seen the TWT (Tuesday, Wednesday and Thursday) phenomenon at play as workers prefer to work from home on Mondays & Fridays. Despite this, the classic rule of thumb of allocating 10-15 sq.m. of space per employee to gauge an occupier’s spatial requirement is clearly being challenged. Paradoxically, there may be a positive spin off for the locations where these offices are located as the total number of distinct visitors during the week increases.
There is still uncertainty around the long-term effect of Covid-19 on long term office working models. This is manifesting itself in the leasing environment through shifting occupier space requirements, greater lease flexibility and increased demand for fitted-out spaces. Businesses will use lease events such as expiries and break options to rationalise their workplaces to reflect their adopted work models. As workplaces continue to adapt and adopt modern working practises it is important for occupiers to be cognisant of the spatial requirements needed to accommodate and attract the modern workforce and for investors and owners to be cognisant of the effect these work models will affect demand levels and lease events.
If you wish to discuss developments in the office markets further, please contact offices@bannon.ie.
Author: George Colyer, Surveyor, Bannon
Date: 2nd June 2023
M50 Business Park provides c. 18.890 sq. ft. of modern fitted office accommodation on new lease terms. Occupying a high profile location at the junction of Ballymount Avenue and Ballymount Road Upper, the available space provides both open plan and cellular office accommodation, as well as meeting rooms and a canteen facility. Offices available from 9,000 – 18,890 sq.ft. with generous car parking provisions.
For more information contact Lucy Connolly or Julia Halpenny.
Bannon’s latest Office Pulse is now live.
Take up for the first quarter of the year reached 278,000 sq.ft. across 45 transactions, representing a 45% decrease on Q1 2022. Deal sizes have decreased this quarter with 76% of transactions falling into the sub 5,000 sq.ft. bracket resulting in an average deal size of 6,300 sq.ft. Lease flexibility continues to be the dominant driver in demand. There is over 600,000 sq.ft. currently reserved (71 Transactions) which should boost Q2 figures.
See full details below together with expert insight from Lucy Connolly and Cillian O’Reilly.
To view the full report, please click here.
Some of our property management colleagues in attendance at the Shopping Centre Managers Association Ireland annual meeting this morning.
Property Picnic 2023 is complete – what a superb night of fun and entertainment with close to seven hundred people from the property sector all gathered in 1 Windmill Lane.
We have yet to add the numbers, but we will be excess of €100,000 again this year, all in aid of Cancer Trials Ireland. Thank you to all the Bannon volunteers who helped put the event together.
Thanks also to all our supporters this year including:
Keystone Sponsors: Core Capital Limited, Hibernia Real Estate Group Ltd, Glass Bottle, Mastertech Group, Matheson LLP, MCR Group, PrepayPower
F&B partner: House Dublin
Raffle sponsor: Red Rock Developments Ireland
All 46 supporting firms.
And finally, to all those who attended and made donations.
We have proven two things – firstly, we are fortunate to work in a very generous and friendly sector with great people and secondly, we have the ability to help when we can. Cancer Trials Ireland are doing fantastic work, we wish them continued success and no doubt this year’s donation will help them on their journey.
