Its latest Q3 Irish Retail Market View publication notes that the biggest risk to retailers at present is the impact the threat of increased austerity measures in the Budget will have on consumer spending patterns. However, they say that the retail property market remains active regardless with occupiers and investors continuing to look for opportunities.
The report by CBRE notes that the Summer months were characterised by a steady level of occupier activity, as retailers availed of the downward pressure that is being placed on prime retail rents across the country. According to CBRE, Prime Zone A retail rents decreased by 10pc since Q1 2012 to now stand at approximately €4,500 per square metre, a level which is on average 55pc below peak levels. Prime shopping centres also declined by an average of 8pc to stand at approximately €3,000 per square metre.
Florence Stanley, Executive Director of Retail in CBRE comments “Many retailers are pursuing aggressive expansion and relocation plans to take advantage of the lower rents and the ability to sign shorter, more flexible leases than was the case only a number of years ago. Grafton Street in particular attracted a number of new retailers over the last six months, while outside of the capital’s high streets international occupiers signed leases for accommodation in prime locations and shopping centres.”
Some of this increased activity was mirrored in High Street footfall figures which showed an improvement in the number of shoppers on the capital’s high streets in Q3 2012 in comparison to the same period in 2011. The level of footfall on both Grafton and Henry Street improved in the quarter, with more than 11,400 shoppers per hour recorded on Grafton Street and 11,000 shoppers per hour along Henry Street. On average shopper numbers increased 16.7pc in Q3 2012 in comparison to a year previous.
Although prime retail locations are performing well and enjoying low levels of vacancy, an analysis of vacancy levels throughout the country’s high streets carried out by CBRE, shows that not all towns are performing to the same degree. As of Q3 2012, the high streets of Athlone and Limerick recorded the highest levels of vacancy of all towns surveyed, at 18.2pc and 16.3pc respectively, while Killarney, Galway and Dublin recorded much tighter levels of vacancy of sub 4pc.
Suzanne Barrett, Associate Director at CBRE who carried out the research notes that “High streets in many towns across the country have suffered as a result of the development of new shopping centres or retail offerings elsewhere in the town. As was noted in the Retail Planning Guidelines released earlier this year and as our vacancy audit shows, towns where development occurred outside of the traditional core town centre and where high streets have been left to compete without upgrades or visible improvements, are struggling to attract new occupiers”.
The report also analyses the uses on the major high streets throughout the country which show public houses and gift shops as the most dominant user type on the practically fully occupied high streets of Killarney and Galway, while ladies wear accounted for the greatest proportion of occupancy in Cork, Belfast, Dublin and Kilkenny. Meanwhile more than 20pc of occupiers on Limerick’s High Street are fast food retailers.