27 ANNIVERSARY An Irish Story
Ireland and Irish shopping centres have undergone remarkable times in the last 20 years and never more so than recently, writes Sean Kelly
W
hat’s the capital of Ireland? “Oh, about 20 Euros.” And so goes one of the many jokes doing the rounds in the economically-ravaged Republic. What a difference two
decades makes and the early 1990s now seem a lifetime away. The economy – then based on the Irish Punt – started to truly prosper thanks to a combination of tax and industrial policies, European Union funding and a healthy measure of Gaelic self- belief.
This was affirmed by Morgan Stanley analyst Kevin Gardiner
when he gave the country its “Celtic Tiger” moniker in 1994. Between 1995 and 2007 GNP growth rates ran from 2 to 11 per cent and unemployment fell to around just 4 per cent. Ireland’s success story seemed unstoppable. But it was a country that had begun to believe its own hype. A
decade ago Shopping Centre’s own Irish feature headline “The Good Life” summed up the enthusiasm – though it did note that no one “would be surprised if there were to be the odd sign of nervousness that the bubble might be about to burst”. By 2008 the ‘craic’ was well and truly over. Ireland was in the financial equivalent of cardiac arrest and now the nation feels like it has done ten rounds with a tiger. An IMF bailout of €85bn in late 2010 was contingent on the government reducing budgetary deficits to just 3 per cent by 2014. There has been a GDP contraction of 14 per cent with unemployment matching that percentage. Much has been made of the exodus of Irish youth with an estimated 52,000 reportedly departing over the past year.
The bad news has continued. In late April Ireland halved its
anticipated growth forecasts to just 0.75 per cent for 2011. In May of 2011 Lloyds Bank predicted a further 10 per cent fall in Irish real estate values on top of the 60 per cent fall which Investment Property Databank estimates has already occurred in the past three years. And, of course, two years ago nobody had heard of the name that
is now on every property person’s lips: Gníomhaireacht Náisiúnta um Bainistíocht Sócmhainní or the National Asset Management Agency (NAMA). The so-called ‘Bad Bank’ has taken over some €77bn of loans by banks to property companies – though its actions attract criticism from some quarters. Stephen Murray, European retail director of Jones Lang LaSalle,
puts two decades of change in context by pointing out that in 1991 there was a total purpose-built shopping centre/retail park stock of 695,000 sq m for a population of 3.525m (197 sq m per 1,000 people). By 2011 the stock of shopping centre or retail park floorspace had risen by 482 per cent to 3,352,000 sq m. Applying the 2006 census population of 4.470m people it now equates to 750 sq m per 1,000 people. The shopping centre figure (excluding retail parks) is 440 sq m per 1,000 people meaning Ireland now ranks second highest in Europe in terms of shopping centre retail space per capita. “In 1991 the market saw quite an active year with 88,477 sq m
built,” says Murray who was a JLL letting agent back then handling the Omni shopping centre in Dublin and Eyre Square in Galway. “Then lettings were not helped by Desert Storm in Iraq and 15 per cent mortgage interest rates. There was a much-warranted catch up with our European neighbours in the first decade after 1991. However, the extent of oversupply in specific areas – retail parks in particular and excessive planning permission grants – combined with easy funding, lack of in-depth demand analysis and substantial rental growth, has created a risky cocktail in the second decade.”
“My take is that it was never going to be a soft landing - that was not an option”
In 1991 as Shopping Centre was making its debut, Stephen Vernon,
then managing partner of property adviser St Quentin in London, found his corporate gaze caught by the Emerald Isle. Within two years he would have crossed the Irish Sea and set up shop at Green Property with chairman Prof Michael J. MacCormac, who passed away in 2010. The two had plans for a shopping centre development on Dublin’s M50 ring road. Together they broke ground with Blanchardstown shopping centre in 1994 opening it in 1996. Vernon never looked back – building a listed corporate entity
February 1999
April 1999
April 1999
April 1999
of Dundee’s Overgate Centre was well under way and expected to re-open in the Spring.
The reported £60m redevelopment
Sovereign Harbour, Eastbourne, with 31,000- sq ft of retail space across 26 units.
The Waterfront opened at
MEPC bought the two-year-old Loch Lomond factory outlet centre from Acreground for £7.075m.
Glasgow’s Buchanan Galleries opened. It was described as the decade’s “most significant city-centre shopping development.”
www.shopping-centre.co.uk June 2011 SHOPPING CENTRE
20 YEARS Leading the industry for
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