2016 has seen prime Dublin retail gain traction in terms of investment activity, rental value growth, occupational activity and capital values. Improving domestic economic conditions have translated into both retail sales and consumer demand trending upwards over the course of 2016. Despite monthly fluctuations in consumer sentiment, driven by a sense of external uncertainties, the underlying trend remains positive. The improvement in these indicators bodes well for the retail property market.
The retail sector was the most dominant investment asset class in 2016, accounting for 51% of total investment turnover, and reaching an impressive €2.27 billion during the year.
Investment in the sector was strongly driven by high profile shopping centre transactions, most notably Blanchardstown Town Centre. However, a number of prime Dublin high street units also transacted.
In terms of occupational activity, 2016 saw a number of international retailers occupy space on Dublin’s prime streets, Grafton and Henry Street. Examples include the Swedish clothing and accessory retailer, & Other Stories, opening its first Irish store at no. 26-27 Grafton Street, UK brand Ann Summers opening its latest Irish store at no. 3 Henry Street, and Victoria’s Secret committing to no. 28-29 Grafton Street.
Increased demand, combined with a lack of prime retail floor plates, saw upward rental pressure for headline Zone A rents on both Grafton and Henry Street, which stood at €6,500 per sq m and €4,680 per sq m at year end respectively. Upwards movements are anticipated to continue through 2017.
2017 is set to be a busy period for Dublin’s prime high streets. Continued demand from international retailers for large floor plates, combined with the cross-city Luas works, has sparked development activity on Grafton and Henry Street’s surrounding areas. Although in the early stages, once completed, these schemes will expand and strengthen the current city centre prime retail landscape.
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