Shopping isle

Dublin’s retail sector is going from strength to strength and could soon rival London in the shopping stakes. Donal Buckley reports

The strength of retail demand in the Dublin market was highlighted by two contrasting events this year.

One was the record €5,188 per m² rent achieved when the fashion group Reiss acquired a lease on a prime property at 1 St Stephens Green near the top of Grafton Street in August. The second was a report from DTZ, which has become a Pandora’s box for the Dublin retail market.

Innocently enough, the DTZ Retail Guideline Strategy forecast that retail spending in the Greater Dublin Area (GDA) could grow from the current £5.3bn (€8.5bn) to between £6.8bn (€10.8bn) and £7.1bn (€11.4bn) by the year 2006. Within a further five years it predicted that retail spending could reach between £8.5bn (€13.5bn) and £9.7bn (€15.4bn).

More contentiously however DTZ’s report, commissioned to provide advice to Dublin’s planners on the GDA requirements for new retail space and on the preferable locations, has added to the controversies for developers and planners in the south and west of Dublin county.

Since the report was published in spring this year, two key things changed. Firstly, the national census of population was published and it showed Ireland’s population growth was fastest in and around the capital so accentuating the concentration of population in the GDA.

Secondly, a number of developers have submitted planning applications for new retail developments, which were not envisaged in the report.

The most notable of these was Treasury Holdings’ proposed Balgaddy town centre in west Dublin, part of the South Dublin County Council (SDCC) area.

DTZ’s report, however, recommends the major town centre for west Dublin should adjoin the Liffey Valley shopping centre. This existing centre is owned by a consortium which includes Aviva/Morely Trust, Grosvenor Holdings and local developer Owen O’Callaghan.

This is proving to be DTZ’s most contentious proposal because of the rivalry between the two alternative developers for the new west Dublin centre and because of the investigation currently underway into allegations of corruption surrounding the initial planning decisions on the existing Liffey Valley centre.

Positively mixed use

At Balgaddy, about a mile to the west of Liffey Valley, Treasury Holdings has submitted a detailed planning application to accommodate 1.4m sq ft (130,190m²) on an 8.79ha greenfield site currently designated as a district centre. Its location is part of an overall 15.4ha Balgaddy site, and these plans represent a mixed-use phases one development. It will include residential units, offices, retail, a leisure centre including a 10 screen Cineplex, gym, bars, restaurant, a 252-bed hotel, and a 202-bed hotel.

Meanwhile Owen O’Callaghan, who developed Liffey Valley to its current stage, is working on a planning application for the new town centre at Liffey Valley. His new development will also include residential, an evening entertainment square consisting of pubs, restaurant, a civic square, a supermarket, a new hotel and offices.

Two years ago O’Callaghan’s planning application to add 250,000 sq ft (23,225m²) of extra retail space including a food store to the existing Liffey Valley SC was refused by the Planning Appeals Board. Instead the company focused on office development and secured permission for 17,287m² of offices, more than half of which is under construction.

However local political manoeuvres are making the decision as to where to put the new retail a very prolonged process. In the last six months SDCC councillors twice deferred a decision on the preferred location for the major town centre, to serve an area including Lucan which has the fastest-growing population in Dublin, having almost trebled in six years. The first deferral was because councillors said they would prefer to know the findings of the ongoing government tribunal into alleged bribes which are said to have influenced the original grant of planning permission for the existing Liffey Valley. However this tribunal could take years.

In the meantime Treasury’s Richard Barrett is making the case to the councillors that they should not designate Liffey Valley for the new town centre because it would not prove to be sustainable and consequently is likely to be refused planning permission by the Planning Appeals Board.

Not surprisingly Barrett argues that Balgaddy’s railway station will offer a more sustainable public transport interchange and that it has potential for development on all four sides of the site. He states that Liffey Valley has less potential for serving a large immediate neighbourhood and because of its position on the M50 ring route around Dublin could only prove viable by generating shoppers who drive resulting in traffic congestion.

SDCC planning officials, however, have refused permission for Treasury’s plans for Balgaddy because of inadequate road access. Treasury is appealing this decision, partly on the grounds that the SDCC had previously planned to develop such road access. It also points out the DTZ’s recommendation of Liffey Valley was at the specific request of a SDCC manager and it questions this influence on the DTZ recommendation.

The DTZ report, which also covers retail demand in the three counties of Wicklow, Meath and Kildare, recommends that no new regional centre should be established in the area.

Dublin city centre is DTZ’s preferred centre for most high order shopping, implying continuing expenditure inflow to the city centre from the rest of the GDA.

Within the Dublin City Council area it has identified considerable capacity for additional comparison shopping.

The report suggests this would be met by new shopping developments in the docklands area and elsewhere in the city centre; the expansion of district shopping in the suburbs; one or two retail parks together with the equivalent of one or two superstores in suburban Dublin. Treasury Holdings is hoping to develop plans for the new docklands retail centre which would be accessible from the eastern end of the ring route around the city.

Away from the fracas over the proposed new town centres, Treasury is developing plans for a district centre shopping at Ballymun between the city centre and the airport. Five miles to the east, Tesco is currently building a shopping centre at Clare Hall, off the Malahide Road between Dublin Airport and Dublin Bay which will be the first in a series of new shopping centres, as opposed to stand alone stores, being developed by Tesco on Irish sites.

In Dun Laoghaire, Rathdown, DTZ sees Castlethorn’s new town centre at Dundrum, due for completion in 2005, as absorbing much of the comparison expenditure capacity in the short-term.

Demand exceeds supply

With House of Fraser and Tesco among the anchors, already there are reports that prelet demand exceeds supply.

In the meantime however Treasury Holdings has submitted plans for an expansion of its Stillorgan Shopping Centre, about one mile away, which is designated as a district centre. To facilitate this development the council has increased the limit on retail development space in both Stillorgan as well as in Blackrock village to 250,000 sq ft. DTZ’s report has also approved district centre retailing at Cherrywood, where Dunloe has recently agreed to acquire the other half of the ownership from British Land.

Another development not envisaged in the report is Park Developments’ recently submitted plans for a £150m mixed commercial development at Carrickmines interchange on the M50 motorway around Dublin.

Although there are differences of opinions with the varying schemes, there is no doubting the amount of development going on within the retail market in southern Ireland, which can only be of benefit to the whole retail scene.

Prime retail rents
Grafton Street	€5,188 per m²
Henry Street	€3,825
Blanchardstown	€2,390
Liffey Valley	€2,152
Jervis Centre	€2,152
The Square	€1,777
St Stephens Green	€1,572
Secondary City Centre	€1,093
Source: Insignia Richard Ellis