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Shopping centre development trend in Ireland finally reaches maturity, Jones Lang LaSalle study shows

Shopping centre development in Ireland has now reached maturity, a new pan-European study reveals.
According to Stephen Murray, European Retail Director of Jones Lang LaSalle, which carried out the study, Ireland ranks second highest out of the 25 countries examined, with approximately 440 m2  of shopping centre stock for every 1,000 people. In sharp contrast, Bulgaria has the least amount of per- capita shopping centre stock, with just 25m2 for every 1,000 people.
 “Evidence that Ireland’s current phase of development is petering out is obvious once you examine the percentage of shopping centre pipeline currently under construction; it now accounts for about 5% of the total current stock.  By contrast, the extremely rapid pace and extent of new shopping centre development has been unprecedented.  The country’s first shopping centre in Stillorgan opened over four decades ago in 1966. However, the findings of the Jones Lang LaSalle study reveal that since 2003, total shopping centre floor space in Ireland has actually doubled.
 “With much more intense competition for a share of customers’ wallets, the winners in terms of the current phase of shopping centre developments will be those that have a significant range of shops in addition to leisure offerings such as cinemas and restaurants as well as ease of parking. Examples include Blanchardstown Town Centre and Dundrum Town Centre in Dublin and the Crescent Shopping Centre in Limerick.
“Notwithstanding pockets of clear over-supply – or inappropriate supply in the case of some recent new or pipeline centres such as Limerick – it is probable that these larger established schemes will, in fact, see potential for phased extension developments in years to come. However, in the case of neighbourhood or small district centre schemes, it is unlikely that significant additional development will be seen for at least five years. In order to maintain and maximise property value in such a competitive sector, it will be essential for landlords to maintain improvements in tenant mix; to invest in active asset management, and to ensure a greater degree of partnership with their occupier tenants.
“As the rising tide that helped the values for all centres finally recedes, we will see more modest rental growth in the medium term for the best run centres. This will be at the direct expense of a significant decline in rental income and increased unit vacancies for many other centres. Those owners who do not identify their centre’s points of difference in the market, and quickly develop and implement a strategy to build on their market advantages, risk failure”, Murray concludes.