While UK representation was smaller than usual at the annual showcase organised by the British Council of Shopping Centres, there was no shortage of Irish developers
A YEAR IS a long time in the retail market, going by the fall-off in business inquiries and the scaled down showcase for the British and Irish shopping centres in Liverpool last week.
A year earlier in Newcastle, there was no talk of a bubble in the property market; at worst it was a bouncy castle. That event was more a celebration of the vast amounts of money made on new stores and new shopping centres rather than a promotional event for more facilities in the pipeline.
However, things have changed quite drastically in the meantime and many of the same multinational developers and traders were curiously missing from the huge new venue in the Liverpool docklands.
The reality of a heavily depressed market was all too evident in the absence of the usual ostentatious stands flowing with champagne and gifts and the noticeably smaller crowds during the three-day event.
Unlike other property sectors, retail is immediately affected by a cutback in discretionary spending. That is exactly what has happened on the high streets and the shopping centres in Britain and Ireland in recent months and, with consumer sentiment plummeting in the economic downturn, banks are naturally reluctant to fund large new shopping centres, particularly in the provinces.
The stand-off between the developers and the banks has not been helped by the fact that several new provincial shopping centres which opened in Ireland over the past five years have been performing abysmally. In at least one case sub-contractors still have not been paid and, with capital values down by up to 30 per cent in some instances, businessmen who pumped substantial funds into these ventures have to face the reality that their investments are now either heavily depleted or gone altogether.
While the British representation was smaller than usual at the Liverpool event organised by the British Council of Shopping Centres, there was no shortage of Irish developers, many of whom were able to avail of cut-price exhibition space.
Shelbourne Developments may well have been one of them because their highly professional staff naturally seemed more intent on promoting the international profile of Garret Kelleher's company than in finding tenants for two remaining vacant shops in their last development in Tallaght.
For some of the other Irish developers, the purpose of the exercise was to find anchor tenants to ensure that the banks will play ball when the planning permission comes through. Michael Harrington, a retail expert with agents HWBC, said that many developers needed to get legal commitments from anchors before they could embark on highly expensive new schemes. Once the anchors were lined up, they could then set about attracting the standard retailers, he said.
Developers with this strategy in mind would be well aware that Dublin developer Liam Carroll has had to stop construction of the massive new Parkway Village shopping centre in Limerick city simply because he has not yet lined up his main occupiers. But he is still hopeful of rescuing the scheme by getting Tesco and Penneys on board despite the proliferation of new retail developments around the city.
Developer Joe O'Reilly of Chartered Land will have no such problems with three shopping centres he was promoting in Liverpool. Even before the event got under way, Chartered Land announced that it had completed legal contracts with John Lewis to anchor the large mixed-use development planned for the former Carlton cinema site on O'Connell Street. The UK department store is to trade out of one-third of the 69,675sq m (750,000sq ft) of retail space in the scheme. Chartered Land, which is advised by Bannon Commercial, also had the advantage of having completed negotiations with the House of Frazer and Marks Spencer to occupy the main stores in the third phase of The Pavilions in Swords. The plan here is to more than double the overall retail content to 102,190sq m (1.1 million sq ft).
The third Chartered Land property, Dundrum Town Centre, is also set to be considerably enlarged on foot of its runaway success.
O'Reilly's decision to promote Dundrum as a serious venue for good restaurants - it will have 30 in all when Roly's of Ballsbridge fame moves in before Christmas - has greatly enhanced the overall appeal of the centre, particularly at night. A number of UK shopping centres are now studying the formula in the hope of repeating the success.
Chartered Land's rival development in the north inner city, Arnotts' Northern Quarter, also does not have to worry about the uncertainty of finding a strong anchor. John Laker, who is overseeing the project for Arnotts, was on hand in Liverpool to launch a low key promotion for the centre. "Dublin Central has Britain's favourite department store as an anchor and we have Ireland's favourite department store." Arnotts, that is, which is to occupy a floor area of 27,870sq m (300,000sq ft). Letting agent Larry Brennan of Savills is already gearing up for the development even though Arnotts will remain in situ until January 2010.
He is likely to target Zara which is due to vacate its present Henry Street store around the same time as Northern Quarter is due to open in 2013. Debenhams is apparently keen to take back the Zara space once its 10-year licence runs out in 2013.
Northern Quarter is also likely to pitch for Next and Top Shop both of which are apparently restricted by the size of their outlets in the Jervis Centre. That centre has suffered since Debenhams pulled out but is expected to pick up business again when Arnotts begins trading on two of the former Debenhams floors before Christmas.
Back at the British Council of Shopping Centres, the organisers have been coming under increasing pressure to hold next year's showcase in Dublin given the strong Irish support over the years and the fact that the new National Conference Centre in the Dublin docklands and the nearby O2 concert venue are due to be completed in good time. The promoters are having none of it, insisting that Dublin will still not have adequate facilities to accommodate the event.
One of Dublin's top retail agents does not share this view, arguing that with the retail market in free fall, next year's event might well be accommodated in a backroom of the Shelbourne Hotel. Let's hope he is wrong.
