According to Savills latest report on Dublin's prime retail locations of Henry/Mary and Grafton Streets, the Irish capital is experiencing continued stability with occupancy levels reaching 100% on Henry/Mary Street and 98% on Grafton Street.
This occupancy level reflects a respective rise from 99.4% and 98.1%, at the close of H1 last year. The firm's research shows that the retail mix on these two prime retail locations continues to be dominated by department stores, clothing and footwear retailers.
The international real estate advisor notes that the strength of Henry/Mary Street can be attributed in part to the refurbishment of flagship department store Arnotts, and the breadth of offering provided by the street's anchor store mix, which includes international brands such as Forever 21 and Marks & Spencer. Two units that were vacant this time last year on Henry/Mary Street are now occupied by Irish owned beauty store Hairspray and UK health store chain Holland & Barrett.
In the last twelve months, five new retailers have arrived on Grafton Street, with products ranging from sports (Halpenny Golf) to male clothing (Genius), jewellery (John Brereton and Ernest Jones) and an ice cream parlor (Gino's Gelato). Of six currently vacant retail units on Grafton Street, one is due to the administration of La Senza and another a result of the merger between Irish Nationwide Building Society and Anglo Irish Bank, rather than a decision to relocate.
Larry Brennan, retail director at Savills Ireland, comments: "The broadly positive picture on Dublin's prime retail streets remains similar in 2012 to 2011, with impressive occupancy levels not altering the fact that it is still a tenant's market. While we anticipate an increase in the number of deals on the occupier side in the coming year, we do not have reason to expect significant growth in rental prices or investment transactions."
According to Savills data prime retail rents in Dublin are yet to recover from the 50-60% decrease at the end of the 2006-2008 peak, with Grafton Street achieving 3,000 per m² per annum and Henry/Mary Street reaching 2,500 per m² per annum, subject to exact location and unit size and quality.
Joan Henry, head of research Savills Ireland, says: "The effect of the 'Yes' campaign having secured the vote in May's Stability Treaty is widely expected to have a positive effect on consumer spending, so we have reason to expect demand for Dublin's prime retail core to remain high throughout 2012. Despite a 2% VAT increase in January 2012, Dublin's consumer confidence levels are unexpectedly buoyant."
In terms of investment, the firm notes that activity has been minimal for the last two years, making yields difficult to determine. However, Savills estimates prime yields to be in the region of 7.5%, still comparable to 2011's forecast at 7-7.5%.