Dublin’s Grafton and Henry Streets are recording occupancy rates of 98.1% and 99.4% respectively, as rents on new prime zone A lettings fall by up to around 50% to pre boom levels, achieving €4,000 on Grafton Street and €3,000 sqm/yr on Henry Street.
Dublin’s Grafton and Henry Streets are recording occupancy rates of 98.1% and 99.4% respectively, as rents on new prime zone A lettings fall by up to around 50% to pre boom levels, achieving €4,000 on Grafton Street and €3,000 sqm/yr on Henry Street.
2011 will see Grafton Street achieve near to full occupancy by the end of the year with the arrival of two new retailers according to Savills.
The international real estate advisor reports that take up from new retailers has lead to a scarcity in supply with very few small units available causing increasing demand for adjacent locations such as College Green, which will see the opening of Abercrombie and Fitch later in 2011. New retailers to the area have included Disney Store, Pandora, Sketchers and Forever 21 – all have opened stores on these key streets in the past year. This strong take up is reflected in an increase in retail sales volumes by 0.6% in the first quarter of 2011, compared to Q110, however values of sales remained down year on year by 1.2% illustrating competitive pricing amongst retailers.
Larry Brennan, head of retail for Savills Ireland, says: “The high levels of demand has led to a number of unsatisfied requirements and has seen some retailers looking at less prime locations surrounding Grafton and Henry Streets. These low vacancy rates will see a positive outlook for the streets as new stores continue to open. While the improvement in occupancy levels is encouraging, it is still a tenants market and we do not predict a return to significant rental growth at this time.”
In terms of investment, transactions have been minimal on both streets over the last 12 months and this has meant yields are difficult to estimate with a guide of 7-7.5% on Grafton and Henry Street, and shopping centres at 8.5%. A prime retail investment sale has not been completed since July 2010.
Joan Henry, head of research at Savills Ireland, says: “Dublin is increasingly recognised as a European hub for high value jobs in the IT sector, and this has helped boost its competitiveness as a city in terms of rental levels and incentives. The lack of transactional data reflects the slow investment market but with this positive outlook for Grafton and Henry Streets, in particular, we would expect to see appetite for retail product in these locations if it were to be brought to market.”
For further information, please contact:
Larry Brennan, Savills Ireland, +353 (0) 16181302
Joan Henry, Savills Ireland, +353 (0) 16181300
Victoria Buchanan, Savills press office, +44 (0) 2074098940