Bannon Retail Pulse – January 2023

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The first Bannon Pulse of 2023 is now live. We look back at the strong level of activity in 2022, highlighted by the large number of lettings and new market entrants. Our occupancy trackers finished 2022 in positive form, as did our trading analysis across the retail categories. Neil Bannon gives his take on the market concluding that, ‘The opportunity for informed investors is to acquire retail assets with robust performance but priced to reflect a negative narrative’.

To view the full report, please click here.

Bannon Investment Pulse Q4 2022

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

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

At a Glance: Dublin Office Market 2022

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Dublin Office market take up for 2022 exceeded the ten year moving average figure and surpassed 2,600,000 sq.ft. by year end. This figure was boosted by a busy Q4 with over 804,000 sq.ft. transacting in the final quarter of the year. This was largely attributable to the two largest transactions of the year, Citigroup’s acquisition of 300,000 sq.ft. at Waterfront South Central and SMBC Aviation Capital’s leasing of 135,000 sq.ft. at Fitzwilliam 28.

Whilst not back to pre-covid levels, take up has increased by 53% on 2021 figures and we are seeing further stability in the market with an upsurge in activity from the Professional services and financial sectors.

Bannon Retail Pulse – December 2022

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Our final Retail Pulse of 2022 has just gone live. All in all, an exceptionally busy year for the team at Bannon. 2023 is looking very promising for Retail.

Neil Bannon concludes this Retail Pulse with 10 Reasons to be Cheerful about the Retail Landscape in Ireland (page 4).

To view the full report, please click here.

Bannon Retail Pulse – November 2022

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Bannon’s latest monthly Retail Pulse has now gone live. Neil Bannon looks at recent retail sales data to demonstrate how the negative narrative continues to clash with reality.

To view the full report, please click here.

 

 

Sustainability Blog – COP27

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The environment and climate change were once again the centre of attention for world leaders and delegates last month at the UN Climate Change Conference, COP27. Taking place in the Egyptian coastal city of Sharm el-Sheikh, the conference welcomed more than 100 Heads of State and Governments and over 35,000 participants. 

One of the major talking points of COP27 was greenwashing. Greenwashing is the process of conveying a false impression or misleading information about how a company’s actions and/or products are environmentally sound. The UN High-Level Expert Group on Net-Zero Emissions Commitments of Non-State Entities evaluated climate commitments and action plans of large multinational institutions finding one-third of the world’s 2,000 largest firms, by revenue, have publicly stated net zero goals. A staggering 93% of them have no chance of hitting their self-elected targets without drastically ramping up their current initiatives. 

Coinciding with COP27 and in contrast to the greenwashing mentioned above, retailers including H&M, Kering and Inditex committed to purchasing over half a million tonnes of low-carbon alternative fibres for clothing and packaging to help reduce global emissions. It is reported that every tonne of clothing produced using alternative fibres will save between 4 and 15 tonnes of carbon emission. This commitment may provide the market pull required to attract investment to scale the alternative fibre sector which currently accounts for a tiny fraction (7.5 million tonnes) of man-made fibres produced each year.

The big question remains, can countries and institutions step up their efforts in tackling climate change?

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

 

The National Property Summit 2022

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The impact of macroeconomic changes on the property sector being discussed at The National Property Summit 2022 today.

Our Chairman Neil Bannon will be discussing the commercial property sector with Suzie Nolan from Aviva, Vincent Harney and Carol Tallon from Property District.

Office Market Commentary Q3 2022

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The Bannon Dublin Office Market report is available now. Take up for the third quarter reached 819,000 sq.ft. representing a 60% increase on Q2 and a 77% increase in the same period last year. Lease flexibility continues to be sought in the short term as companies continue to assess their office requirements as remote and hybrid models are fully determined.

We are seeing an increase in activity from the financial and professional services sectors, many of whom are seeking to satisfy their ESG policies in terms of their real estate decisions.

To view the full report, please click here.

What exactly is the Residential Zoned Land Tax (RZLT)?

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A contentious and topical issue for some time now, the Residential Zoned Land Tax (RZLT) will impact a range of stakeholders across the development land sector. The RZLT, which was introduced in the Finance Act 2021 effectively replaces the Vacant Site Levy, with a similar objective of increasing the supply of residential accommodation.

As an annual tax charge, it will be calculated at 3% of the market value of land zoned suitable for residential development which is or can be readily serviced. Each local authority is obliged to generate a residential zoned land tax map, with draft maps published from the start of November 2022.

Land suitable for residential development from the 1st of January 2022 and development not commenced prior to the 1st of February 2024 will be liable for taxation. Landowners seeking to be omitted from the tax have until the 1st of January 2023 to make an appeal to their Local Authority. Impacted landowners will be expected to self-assess or engage with a registered valuer to conclude the market value of their land in anticipation of the 23rd of May 2024 tax return date.

The limited circumstances under which the RZLT may be deferred include the following:

– Planning permission has been granted in respect of the residential land and a commencement notice, in respect of the residential development, has been lodged with the relevant Local Authority.

– If an appeal relating to the inclusion of the site on the register has not yet been determined.

– Judicial review or appeal to An Bord Pleanála is brought by a third party in relation to the planning permission that was granted.

For more information on the potential implications of RZLT contact nbrereton@bannon.ie.

 

The Great Office Reshuffle Accelerates

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There is a puzzle which involves moving the one empty space around a collection of tiles to make the correct image and it comes to mind when looking at the near-term future of the Dublin Office market.

The headline stats on the office market will tell you that there is 5.6m sq.ft. under construction but that 2.2m of it is pre-let. What these stats hide is that some of that pre-let space is actually available. Take 2 & 3 Wilton Place which are currently being built by IPUT for LinkedIn who have advised the market that they no longer want to occupy these buildings. IPUT’s investment is secure as the buildings are effectively let to a Microsoft business who are legally committed but from the market perspective 330,000 sq.ft. has just moved from the pre-let column to the available to let column and it’s not just buildings that are under construction. As agents on the redevelopment of the ESB headquarters we pre-let 28 Fitzwilliam Place to the tech company Slack subsequently selling the investment to the large European Investors Amundi. Slack were subsequently bought by Salesforce and 28 Fitzwilliam although fully complete since 2021 has never been occupied. To these examples can be added the buildings in the Facebook / Meta HQ in Ballsbridge which they have decided not to occupy although it is not clear that they will be bringing these to the leasing market or just mothball them for the time being.

What this adds up to is a much greater availability of brand-new top-grade office stock than the headline stats would suggest. We have no doubt that all this brand new ESG compliant stock will be occupied. They are good quality buildings in good locations that comply with the sustainability needs of large corporate occupiers. What it will do however is speed up the movement of the tiles around the board. It accelerates the ability of large corporate occupiers currently residing in non ESG compliant buildings to move to the buildings they need. When the image is complete the empty tiles will correspond to the older non ESG compliant buildings which will need to be upgraded, converted to alternative uses or generate a much lower rent than they have achieved heretofore.

At Bannon the Office & Consultancy teams are actively working with clients to solve the more complex problem, how to generate the best return from well located office stock that fails the sustainability test.

 

Author:                 Neil Bannon, Executive Chairman, Bannon 

Date:                     14th November 2022

 

 

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