New research from BNP Paribas Real Estate has revealed that funds own 54% of the buildings on both of Dublin’s prime retail streets – Grafton Street and Henry/Mary Street.
Within that four Irish Funds own 41% of the buildings on both streets, with Irish Life the largest owner of investments on Dublin’s prime retail streets holding 21% of properties. IPUT, Davy Irish Property Fund and New Ireland Assurance own the remaining 20% of the total investment stock on the two prime streets.
Dublin’s prime retail streets are effectively fully occupied, enhancing their appeal to international and domestic investors and occupiers. According to Joan Henry, head of research at BNP Paribas Real Estate the ownership of the majority of buildings on both streets by domestic funds is a direct reflection of the level of confidence in the recovery in both the economy and the retail property market.
The recovery in the Irish economy has continued to gain momentum and last year domestic demand made a significant positive contribution to growth for the first time since 2007. There has been a strong increase in investment, consumer spending is showing signs of strengthening, employment levels are growing, exchequer returns are ahead of target and financing conditions for the Irish government remain very positive. With annual GDP growth at 6.5% in Q1 of 2015, Ireland is the fastest growing economy in the euro area with similar expectations for the remainder of 2015 and into 2016.
20% of the buildings on Grafton Street have changed hands since the beginning of the current property cycle in 2012, with investor demand gaining considerable momentum in 2015. This reflects not only the overall pick up in the investment market but the consistently high occupancy rate that the street has maintained, even at the low point in the last cycle.
Eoin Feeney, executive director, retail at BNP Paribas Real Estate emphasised that demand is considerable from international occupiers such as & Other Stories and Hugo Boss, both of whom will open on Grafton St in the coming months: “Strong occupier demand has witnessed considerable rental growth on Grafton St with prime rents in the region of €500 per square foot currently being achieved.
“Henry/Mary St’s have seen 10 to 20% increase in rents over the last year for certain size categories, with a less clear pattern of recovery seen than on Grafton St. That said, given the strength of economic growth and the level of recovery in retail sales, Henry/Mary streets have considerable rental growth potential going forward”.
Source: BNP Paribas
