With the re­lent­less rise of on­line, is this the end of re­tail as we know it?

Irish Independent - Business Week - - COMMERCIAL PROPERTY - Paul McNeive

lit­tle ef­fect on prime re­tail in­vest­ment val­ues here, which is re­ally a ref lec­tion of the weight of money chas­ing com­mer­cial real es­tate. Prime High Street yields have hard­ened in to 3.5pc and are 4-5pc for prime shop­ping cen­tres like Dun­drum and Blan­chard­stown. That said, I think that run is over, nor do I see much rental growth. On Grafton Street, a de­cent shop has been avail­able for nine months and gen­er­ally, ques­tions are be­ing asked as to who ex­actly are the re­tail­ers that are go­ing to pay these top rents? The com­mon an­swer now is the food and bev­er­age sec­tor, which is thriv­ing, but that is be­ing over­played.

Long-term, I sus­pect that the mar­ket will over­cor­rect be­fore even­tu­ally find­ing a balance be­tween on­line and High Street. The Ama­zon/ Whole Foods deal is it­self proof that the fu­ture is a blend of both. In a fast- chang­ing mar­ket, developers and in­vestors have to be cer­tain that their ten­ant has the right of­fer and busi­ness model. A long lease to a fad­ing dinosaur is worth less than a shorter one to a dy­namic ten­ant driv­ing foot­fall.

Plan­ning pol­icy, rede­vel­op­ment and cus­tomer ex­pe­ri­ence will play a part too. And the one thing that a mar­ket in chaos al­ways presents is... op­por­tu­nity.

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