The retail industry in Ireland employs c285,000 people. That is 12.5% of the working population. As leaders in the sector, we are very proud at Bannon to manage over 50 shopping destinations across the country. These destinations are home to over 1,100 businesses who in turn employ 10’s of thousands of local people. Supporting trade locally is supporting your local community. As we reset after COVID, make the right choice, shop local.
Take up for Q3 has exceeded 460,000 sq.ft. across 53 transactions. This represents a 92% increase on Q3 2020 but more importantly a 26% increase on Q3 2019 (pre covid).
This quarter has seen a significant jump in activity in the suburbs, particularly in the South Suburbs which accounted for 41% of all transactions.
As we enter Q4 there is over 1,000,000 sq.ft. reserved, this coupled with an increase in active requirements and the continuation of a phased return to the office should bode well for the office market for the remainder of the year.
The ‘Office’ has featured heavily in the press over the past 18 months and indeed in everyday conversation, as working from home became a necessity for most office-based employees. Countless articles and blogs have been published with sensationalised headlines such as “What will the office market look like after the great remote working experiment?” to “Productivity of remote workers could determine the fate of the office market”.
Our view is that the office will now assume a wider function with a more consolidated, improved, and focussed environment to manage the challenges of hybrid working and employee engagement going forward.
Over the last 6 years, Irish office developments have evolved considerably with numerous exceptional schemes being delivered. These buildings have attracted leading global firms to Dublin in particular and the expansion of many more as they continue to increase their presence and EMEA HQs. Due to the new standards set by these firms, occupier expectation has increased which has resulted in developers placing more emphasis on emulating what the tech sector has traditionally offered to their employees: amenity, a perk, a perceived life work balance. They have achieved this through the accumulation of amenity-based facilities such as: high end shower and bicycle facilities, concierge services, tenant events, better reception areas, coffee docks and townhall spaces. This together with improved building standards and environmental and sustainability credentials coming more to the fore has given rise to the creation of world class and award-winning office buildings in Ireland.
However, the office sector is about to enter a new phase. Traditionally offices required a centralised location which has been challenged by technology. Prime offices were traditionally clustered around transport infrastructure in a central business district where multiple advantages of proximity to transport, telecommunication infrastructure and labour combined to attract a premium from occupiers, but technology is challenging the need for multiple office functions to take place in a centralised location. This need must be replaced with desire. The user of the building now places more focus on it being a positive environment for their business and their teams.
Like the revolution that has taken place in the retail market where the ability to shop online challenged traditional assumptions on the functionality of real estate, investors in the office sector must adopt an experience focussed strategy. The nascent breakthroughs the sector has made recently to enhance user experience must be expanded upon, implemented at an early stage in the development process and maintained through a proactive management regime.
As real estate’s function evolves, how do we deliver a successful solution for this next phase in the evolution of the office? As mentioned previously User experience is key and this can be achieved through many innovations. These changes do not have to be seen as challenges but as opportunities to be proactive and differentiate a proposition from that of their competitors.
Through Bannon’s extensive property management portfolio and experience in working as design consultants on several large new schemes, our role in working with investors and developers on identifying and enhancing the user experience for office occupiers and their teams has come into sharp focus.
For the investor the asset cannot be just about place making or achieving optimal rental outcome. An investor must consider it as a longer-term play by exploring tenant optimisation i.e. perhaps leasing a portion of the scheme at lower rents to amenity-based occupiers to carefully coordinate a desired aspirational environment. Correct implementation of property and asset management functions is fundamental, they are key to ensuring the functionality for their occupiers from both a corporate and personnel perspective. Communication with occupiers is essential as creating positive experiences for users of the buildings will in turn lead to greater loyalty and enhanced values.
As we move closer to a return to the office in whatever form, recruitment and retention will continue to be the driving force in office acquisitions. Therefore, to adapt to a hybrid model, promote productivity and engage with the ‘new employee’, the office needs to evolve to reflect what people want to use every day. The era of passive office investment is over.
Lucy Connolly is a Divisional Director at Bannon. She has 15 years’ experience acting for a wide variety of private clients and companies in relation to commercial property, office acquisitions, sales and lettings. Contact Lucy by email on lconnolly@bannon.ie
The function of all forms of real estate and the specific requirements of its users continues to change at pace. The most significant factors driving this evolution are non-financial – Environmental, Social and Governance (ESG) requirements.
At Bannon, we are seeing a profound shift from clients towards more sustainable practices. With environmental issues coming to the fore globally and a particular focus of the impact on the real estate sector, Bannon has been proactive in applying innovative and market leading initiatives across assets within our portfolio.
In simple terms sustainability means meeting our own current needs without compromising the ability of future generations to meet their own needs. This encompasses the economy, society and the environment and is often referred to as profits, planet and people.
We know that ESG and sustainability related innovations need to be adopted into every aspect of the management of real estate. Given the scale and variety of assets under our management we are acutely aware of the positive impact changes we implement will have on, the environment and the users of our clients’ buildings.
In partnership with our clients, we have implemented over 40 specific sustainability initiatives in the last 5 years. These initiatives will remove a cumulative 500,000 kg of carbon dioxide annually.
A small sample of the sustainability innovations implemented across our portfolio include:
The focus on sustainability has numerous benefits to all stakeholders and wider society. This ranges from lowering carbon emissions into the atmosphere to a reduction in costs for users of assets. Simultaneously sustainability initiatives provide added value to the assets for investors.
It is very easy to pay lip service to the latest trends in the industry and not take action to back these up. In order to achieve meaningful change, sustainability has to now be at the fore of real estate management. Bannon has recognised this and will continue to work in partnership with all stakeholders to make sure we continue the progress already made.
William Lambe is a Divisional Director with the Property Management team at Bannon.
The Property Management team in Bannon oversees a portfolio of 75 assets for a range of institutional, private equity and private clients.
Retail is back and it’s here to stay, says Christine Dolan of Quayside Shopping centre in Sligo Town.
The centre manager believes that the majority of Irish consumers prefer the social experience of a trip to the shops over the convenience of e-tail.
She told the All-Ireland Business Times that Quayside is busier than ever.
“I think people have missed coming into the shops”, she said. “It’s a totally different experience to shopping online.”
“People love the social aspect of a day out shopping and I think most people are sick of the virtual experiences – there are a lot of people who have been quite lonely through the pandemic and you can’t beat meeting up with friends for a lunch date while having a browse through the shops.”
“There’s a great buzz around at the moment and people are starting to mix again and enjoy themselves.”
A 2020 report by Deloitte found that retail is Ireland’s largest industry and the largest private sector employer, employing almost 300,000 workers – with three in four of those employed based outside of Dublin.
Quayside Shopping Centre opened its doors in 2005 as the largest shopping centre in the northwest of Ireland.
With 130,000 feet of floor space the centre boasts 43 retailers including TK Maxx, Lifestyle Sports and Next.
Quayside lost two retailers over the pandemic, one of them was a Carphone Warehouse store which was a casualty of the Group’s decision to close 80 stores in Ireland last year.
Christine revealed that units have since been filled by two new tenants with more set to come on board.
While Christine admits that competing against online retailers will be a tough challenge in the years to come, she is not worried about the long term future of her industry.
“What we’ve proven here time and time again is that we are resilient.”
“We’ve been through a recession and we’ve come out stronger on the other end so I have no doubt that we will get back to where we were pre-pandemic.”
“In fact, I think we’ll be in a better place.”
According to the Central Statistics Office’s Retail Sales Index retail sales increased by 3.3% in June this year compared to May on a seasonally adjusted basis. On an annual basis, retail volumes were 10.6 per cent higher than in June last year.
Interestingly the retail sales figure for June this year was 13.4% higher when compared to two years earlier, before the Covid-19 pandemic.
Quayside Shopping Centre recently landed its third Business All-Star Accreditation in recognition of its contribution to retail in Ireland.
Reacting to the news, Christine said: “I am delighted to be part of an ambitious All-Star Business. To be accredited for the third year in a row is a huge honour and I see it as recognition of the hard work that goes on behind the scenes.”
Quayside’s focus over the next few months is to promote the “shopping centre experience” and Christine revealed that the centre will be introducing an initiative to help local craftspeople and creators.
She said: “We have plans to relaunch our very successful Christmas markets and hope to do this a little bit early this year. The markets provide a wonderful opportunity for local traders who may have been out of work the last while and want the chance to set up a pop up shop or trading stall.”
“We really want to celebrate with our customers and give something back to the local community this year.”
To learn more about Quayside Shopping Centre Sligo, visit their All-Star showcase page here.
Five Lamps Spar store guiding at €900,000.
Ros Tierney of Bannon says: “We expect to see significant interest from pension investors. This is a high-profile, resilient property with a tenant who has performed strongly throughout the Covid-19 pandemic. The investment offers the purchaser an attractive yield and a long lease term.”
In a wide- ranging feature for “My Job” in the business section of today’s @IrishExaminer, our founder and executive chairman @NeilBannon talks about the the importance of sustainability and what it means in practical terms, how clients are seeking to leverage the firm’s market leading expertise in Retail and apply it to a new user experience for the office.
He believes that there is a need for a big reset in how we imagine the office, moving it from being merely a functional space with a desk to a new proposition where it is an experience-led, productive, enjoyable place to create, collaborate and engage with colleagues.
Neil also talks about prospects for Cork and its hinterland plus how – as Ireland’s largest domestically owned Commercial Property Consultancy in a market dominated by global brands – our firm not only succeeds, it thrives.
Thanks to John Daly at The Irish Examiner for the opportunity.
Take a look at the link below:
We were delighted to hear our Executive Chairman Neil Bannon interviewed on Executive Chair, part of Newstalk’s “Down to Business” radio show on Saturday. Neil and Bobby discussed the big changes to the nature of the Office and how it will move from being functional to experiential. He provided the valuable insight that Investors and Employers are now going to be more concerned about the experience of being in the office. It will no longer simply be a place with a desk but instead somewhere you look forward to visiting in the new hybrid working world.
As a result, he mentioned that Bannon had seen a notable increase in clients seeking to have the firm leverage our market leading Retails skills and apply them to the Office. Other topics covered included how Neil’s Law degree helps with complex lease and purchase negotiations, setting up Bannon with his father Joe and how an independent, Irish owned business, excels at competing with multi-national competitors in this market.
Take a listen…..
In Irish history, there have been numerous examples of the presiding Government instigating a Compulsory Purchase Order (CPO) to implement national projects. Intentions being for the future development of the country and public interest. A Government Minister or Acquiring Authority is required to seek a CPO from An Bord Pleanála and in contentious cases such an order can be expedited to provide a clear pathway and certainty around the delivery of a project of national importance.
The rules for the assessment of compensation for land taken on foot of a compulsory acquisition, generally provide that the value of land shall be taken to be the amount, which the land if sold in the open market by a willing seller, might be expected to realise. Compensation will also deal with issues such as severance and disturbance to remaining landholdings. The characteristics and attributes of the property are considered as part of any assessment of compensation payable to the landowner. If zoning is in place for residential development for example, the potential of that development and the requirement for much needed housing will be reflected in the compensation payable.
But CPOs are not just about money. The decisions and process involved can be emotive. There are many stakeholders to consider and objectives to be met. In some cases there is merit in considering a CPO for the successful delivery of projects of importance. However, for every project that needs to be realised, there are landowners who need to be accommodated. Many have a long history with their property, and they hold sentimental attachment in addition to financial value to them. It is never a simple choice to sell that asset or be forced to sell it.
Depending on the project, such compensation sums for land acquisition may be considered relatively modest given the overall cost of the project. However the personal cost to landowners may be significant as they can be dealing with the compulsory acquisition process for years before reaching a conclusion.
Acquiring authorities must carefully navigate the legal process, taking the obligatory steps with fairness and consideration. Landowners must equip themselves with the knowledge and understanding of the process and the impact on their livelihood. Specialist advice is essential on both sides to understand the true value of the property, both as a single property and as part of a wider scheme.
Our small island will continue on its path of growth and development. Our challenge is to balance how we use the land we have for the good of our people, both users and owners.
Niall Brereton BSc MRCIS MSCI is a Registered Valuer and experienced Compulsory Acquisition Practitioner with Bannon Chartered Surveyors and Property Consultants. Niall has advised on multiple CPOs, acting primarily for individual claimants and corporate landowners.
Bannon is currently advising landowners in respect of the following CPO projects:
https://www.corkrdo.ie/major-schemes/m28-cork-to-ringaskiddy-project/
https://www.foyneslimerick.ie/
Covid-19 and Sustainability awareness are changing Ireland’s commercial property market
By Neil Bannon, Executive Chairman, Bannon
Opinion piece published in the Property Plus supplement, The Business Post, Sunday, July 25, 2021
The Commercial Property market will look very different in the coming years due to two game-changers – Covid and its permanent impact on the World of Work and the little-known but the highly important Environmental, Social and Governance (ESG) system that is the benchmark for assessing the environmental impact of real estate.
The Future of the Office – What’s Next?
The reality is that Covid has changed the world of work for both employers and employees. The office of Now and the Future needs to be accommodated in more sustainable, user friendly buildings, where wellbeing for its users is prioritised and consideration is given to how occupiers and users interact with and experience the building – both internally and externally. Also, we believe that, where possible, buildings should feel like an integral part of local communities and neighbourhoods and not appear “stand alone.”
In the past six months especially, we have noticed a spike in demand from clients who are talking to us about taking our market leading expertise in retail from such buildings as Dundrum Town Centre, Pavilions S.C. and The Square, Tallaght and applying those insights into new work environments. Unlike many players in the Irish market who are international, Bannon is a local business with deep roots here. We understand the “real world” 
culture of the market and understand the importance of real estate delivering long term returns for our clients. However, we believe this can be done in a way that simultaneously creates better places to work and reduces the impact on the environment.
One of the biggest changes to the office is that it is no longer just a place with a desk but has become a destination in itself. To many employees now used to months of focused home working and with limited opportunities for social interaction, a day at the workplace has become an event, a chance to see colleagues, be inspired, collaborate and connect. In this context, smart offices that use digital sensors to monitor and respond to factors such as occupancy, air quality, natural light levels are in high demand as are those with sustainable office design, and the flexibility to accommodate Hybrid workers.
Last, but certainly not least, with health and wellbeing being linked directly to productivity and profitability, offices now need to be a place of safety and empowerment for users.
More focus is needed on the entire user experience. From the moment when someone leaves their house, to arriving at their office, what does that entire journey look like? Is it positive? Do they know where the local barber shop is; the chemist; the coffee shop, the fundamental services? When they enter the car park, is it well lit? Do they feel safe? Does their phone signal work? There are a lot of very personal experiences that impact whether your day is good or bad and I think that the corporate office market needs to really focus and learn from the retail sector which has been doing this for decades, in terms of making sure that every step of the journey is a positive step and a value add. That’s something we can change a lot in terms of the office.
ESG – delivering investor value, sustainably
With the environmental impact of real estate now increasingly important to investors, the ability to monitor, benchmark and improve the performance of buildings has become a fundamental objective for its clients. In Ireland, Bannon was an early adapter of the Investor-driven Global ESG Benchmark for the Real Estate Sector.
This is setting the benchmark for Environmental, Social, Governance (ESG) across the sector. Investors are now concerned with additional real estate performance metrics, such as energy consumption, greenhouse gas emissions and tenant and community engagement. With annual data updates, it will have a significant impact on property valuations and sustainability.
Ultimately, Bannon matches businesses with locations from which they can thrive. Our objective is to create longer term sustainable returns in property which means a greater focus on the function of buildings through active property and asset management and intelligent consultancy services rather than just the traditional focus of our industry Acquisitions, Sales and Lettings.
Sustainability has been one of the most over-used words in the property industry for several years now. It was easy to say but difficult to prove. What recent ESG legislation has done is create the platform that allows investors to see validated sustainability credentials for any property within their portfolio or indeed for something new which they wish to acquire.
Article by The Sunday Business Post
