The Bannon Retail Pulse July 2022 issue is now available. This month, our Executive Chairman Neil Bannon focuses on the juxtaposition between robust economic statistics and a persistently negative narrative. Read Neil’s commentary ‘The Most Depressing Boom’ on page 4.
To view the full report, please click here.
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
Strong outturn for H1 in the Irish CRE sector with total turnover breaking €3bn with the benefit of a €1.1Bn Hibernia REIT deal.
Take up for Q2 was largely on par with Q1 of this year with 511,549 sq.ft. of office accommodation transacting across 61 deals, bringing the YTD take up figure to just over 1 million sq.ft. Whilst not back to pre-covid levels, demand in the marketplace continues with over 1.3 million sq.ft. currently reserved.
2nd Floor, IFSC House, Dublin 1 – IFSC House is a high-profile landmark building with stunning river views, offering a prominent corporate HQ opportunity in the centre of Dublin’s International Financial Services Centre. Extending to over 22,200 sq.ft. the 2nd floor office is available now by way of Sub-Lease or Assignment.
For further information contact Lucy Connolly or Ros Tierney on 01-6477900.
The Bannon team took part in the Nexus tag rugby event held by the Society of Chartered Surveyors Ireland on Thursday evening.
It was great to see so many companies across the industry join the game. A fantastic time was had by all.
Wildflowers in full bloom at Thurles Shopping Centre ahead of the centre celebrating it’s 25th Anniversary this weekend, Saturday 25th June.
Thurles Shopping Centre have a Family Fun day planned, with Beat FM broadcasting on site for the afternoon along with Willy Wonka, magic shows and fun and games for all the family.
The combination of current and expected future demand for housing in Dublin’s commuter belt counties should see strong interest from investors and developers in the sale of a 12-acre land holding in Mullingar, Co Westmeath.
The lands, on the Dublin Road and just 700m from Mullingar town centre, are being offered to the market by joint agents Bannon and James L Murtagh & Sons on behalf of St Finian’s Diocesan Trust at a guide price of €2.75 million.
The subject holding surrounds the diocesan office, which the trust is retaining for its continued use, and is distributed across two parcels of land extending to a combined area of about 4.85 hectares (12 acres). The entire holding is zoned “Proposed Residential” in the Mullingar Local Area Plan 2014–2020 (as extended). An architectural feasibility study prepared by Altu Architects indicates potential (subject to planning consent) for the development of a housing scheme of about 116 units, comprising 27 two-bedroom houses, 35 three-bedroom houses and 54 four-bedroom houses.
While the lands have a sylvan setting adjoining St Paul’s Catholic Church, St Colman’s National School and Clonard House, they are near all the amenities of Mullingar.
Mullingar is a well-established commuter town and sits about 80km or a one-hour drive from Dublin via the N4 and M4 motorway. The town is also served by mainline rail services.
Niall Brereton of Bannon says: “This is a rare opportunity to acquire a development site in one of the most desirable residential locations within the Dublin commuter belt. Mullingar is a highly accessible town given its proximity to the N4 as well as Mullingar train station offering daily services to and from Dublin city centre. The subject land has terrific development potential, subject to planning permission, and will appeal to developers seeking opportunities to deliver new housing units in an area of high demand.”
Our June 2022 Bannon Retail Pulse is now available. This month, as well as keeping track on our indicators which continue to improve, we focus on Grafton Street. We forecast that current vacancy is likely to drop significantly as 2022 progresses with a further enhancement of the mix and offerings on our premier retail street.
To view the full report, please click here.
Managing 25% of Ireland’s Shopping Centres, our Property Management team is very proud of the scale and reach of our growing portfolio. On an ongoing basis, Bannon engages with various contractors to optimise user experience and maintain the appearance and accessibility across our retail portfolio. One such example is Gorey Shopping Centre.
A big thank you to everyone involved in recent projects, namely Arkomax (Refurbishment of Public Toilets & Installation of Parent & Child Facilities) and Breffni Group (Car Park Works). Also, a big thank you to the ever committed Niamh O’Byrne (Gorey Shopping Centre – Centre Manager).
TEAM – Together Everyone Achieves More!
The challenges faced by retail and the effects on performance metrics against the various Covid trading restrictions, have triggered the need to reconsider how retail assets should be categorised and considered. ‘Retail asset’ is a broad, all-encompassing term used to capture Shopping Centres, Retail Parks and High Street/Main Street Shopping. At Bannon, we have extensive data and performance metrics across these retail asset types. This information demands a rethink on how we talk about the sector. While property is inherently heterogenous, with each asset having its own idiosyncrasies, we can refine asset types based on shared and similar characteristics, which overall, relate to the role and function these assets play in their local catchment and community.
How various retail assets have reacted to and been affected by the restricted retail trading conditions that began in early 2020, have driven the need to re-categorise these assets. Areas considered include their ability to perform their function, the extent to which they remain functional against changes in market conditions and the characteristics of each scheme. This has provided a more focused approach that can be used to better inform sustainable tenant mixes and pricing analysis. It is through our ability to combine analysis with Bannon’s unique data insights, that we endeavour to display thought leadership in the commercial property market. Based on this, Bannon will release articles on Community Shopping Centres, Retail Parks and Shopping Parks and High Streets that discuss the drivers that shape and influence key areas. They include their footfall, the opportunities and challenges their occupier mix face against emerging market trends and the role and function of these asset types within the market.
Watch out for this series of articles over the summer.
Author: George Colyer, Surveyor, Bannon
Date: 20th June 2022
The Bannon Retail team is acquiring stores on behalf of national and international retailers with a variety of use categories including Card Factory, Lush, Pret A Manager, Eason, Jump Juice Bars, Matt Britton, McCabes Pharmacy, Tuthills, Gino’s and L’Ombre Hair & Beauty. As part of our work, we advise them on their rollout strategy across Ireland.
On meeting a potential acquisition client, we study the retailer to understand their brand placement and their customer profile. This together with other research allows us to accurately assess where best to locate them.
We secured the acquisition instruction for Smiggle (the Australian go to brand for school, lifestyle and stationery products) and by way of a sample case study we set out below the service provided and our contribution to a successful store roll out.
The Brief:
On successfully pitching our acquisition services, our brief from Smiggle was to provide a full service in identifying new store locations and negotiating lease terms on their behalf.
Stage 1:
Smiggle was a new entrant to Ireland. We began by educating them on the current economic climate, the retail market within Ireland and the retail hierarchy across the country. Leasing structures in Australia are quite different to those commonly used in Ireland. We prepared a detailed presentation on the standard leasing terms in Ireland to include lease length, owner and occupier renewal rights, upwards downwards rent reviews, break options and sub-letting terms. We also assisted them in securing a legal team to represent the company in Ireland.
Stage 2:
Understanding the retailer’s model, we used our expertise to advise where their initial focus should be placed for unit acquisition. We completed a table of target locations and collated an individual pack on each detailing footfall, scheme size, current retailers, available units and sample costs. We toured the Country with them and agreed the target towns and cities where they wished to secure representation.
Stage 3:
We began searching for suitable available units within the agreed target locations. We commenced negotiations and proceeded to agree rental terms, tenant incentives, lease structure, break options and additional tenant specific requirements. On finalising terms, we assisted the legal team in bringing the lettings to lease signing. We assisted them in appointing a fit-out contractor and liaised with the team to provide unit plans and the technical information required to prepare fit out drawings for owner approval.
Outcome
Smiggle saw a stronger opening in Ireland than in any other territory they trade in. The conclusion to the roll out strategy saw the opening of stores in Dundrum Town Centre, Blanchardstown Town Centre, Swords Pavilions, Ilac Centre, Mahon Point Shopping Centre, Crescent Shopping Centre and Winthrop Street in Cork.
Based on our understanding of the market and the Smiggle brand, our advice was an initial roll out of 5-10 store openings. We achieved this target, and the occupier was extremely pleased with our seamless acquisition strategy and the stores secured.
The Bannon Retail team specialises in both owner and occupier representation nationwide. We complete on average c. 170 retail transactions per year. Understanding the market is key whilst advising both owners and occupiers across their portfolio. We collect over 250 pieces of turnover data weekly/monthly, and we use this data and experience to maintain insight as the leading advisors to the retail market across the country.
Author: Jennifer Mulholland, Divisional Director, Bannon
Date: 15th June 2022
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.”
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 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 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.
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.
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.
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 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.
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.
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.
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 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 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.
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.
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 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”.
Bannon is delighted to welcome Tipperary Crystal to Stephens Green Shopping Centre.
We wish the team the very best of luck with the opening.
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;
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;
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
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.
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.
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:
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
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.
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.
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
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:
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
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.
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 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:
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 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.
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”.
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.
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.
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 from everyone at Bannon (including our office dog – Lily).
Mark Hayden, Stephen Keegan, Alison O’Gorman, Brian Morton, Dwane Martin.
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.”
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.
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”.
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.
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