RETAIL RENTS IN prime locations in Dublin are six times higher than the national average – and are tipped to rise again this year.
According to a new commercial property survey by the Society of Chartered Surveyors Ireland, median prime retail rents in the capital are now €6,000 per sq m and are expected to increase by 6% this year.
Meanwhile, desirable retail space in the Ulster-Connacht region now costs €1,150 per sq m to rent. In Munster, average monthly rents for comparable stores are €1,100 per sq m.
The only region where rents are lower than the national average of €837 per sq m is Leinster, where the median prime retail rent is €340 per sq m.
Retail rents in every region are expected to rise this year with Leinster tipped to see the biggest jump, increasing by 9%, according to the survey of 400 chartered surveyors.
According to the Society of Chartered Surveyors Ireland, investment in retail property was “steady” in 2017.
“Prime retail floor space rents continue to grow at a stable rate as has been the pattern over the last few years since the property crash, however rents remain substantially below the Celtic Tiger peak in 2007,” it said.
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Low demand
More than half of the survey respondents said the rise of online shopping is one of the biggest issues impacting the retail property market this year.
Chartered surveyors have identified low tenant demand and unsuitably sized floor space as key challenges for the retail property market as a result of shifting consumer habits.
“Clearly, retailers are aware of the need to adapt to the changing consumer environment if they are to sustain their businesses,” the report said.
Members of the Society of Chartered Surveyors Ireland have also voiced concerns over the impact that weakened sterling has had on Irish retail and how this might affect shop vacancy levels in 2018.
Elsewhere in the report, the office sector was identified as the most active commercial property market last year, especially in Dublin where there was a take up of between 325,000 sq m and 344,000 sq m of office space.
Cork also experienced an increase in demand for office units.
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Demand for office space is predicted to sustain into next year. As a result, upward pressure on rents is expected for 2018.
The chartered surveyors body has also predicted a rise in demand for co-working space this year.
“WeWork (a shared office space provider) has recently announced its take up of 110,000 sq ft of space in two Dublin City Centre locations,” it said.
“Investment on this scale indicates the strength of demand for this type of space and clearly co-working/ flexible office space will be one to watch in 2018.”
Written by Conor McMahon and posted on Fora.ie
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