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The future of Grafton Street is bright

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Retail Thought Leadership June 1536 x 1040

The COVID-19 pandemic sent shockwaves throughout global communities, dislocated international supply chains, triggered steep selloffs in financial markets and disrupted the real estate sector. Out of all the property sub-sectors, ‘high street retail’ has been the most impacted with vacancy levels rising in every global city centre retailing location.

A simple stroll down Grafton Street with its numerous shuttered units more than demonstrates the negative impact felt here in Ireland. The strengths that made Grafton Street our pre-eminent retail destination suddenly became its greatest weakness, as the natural customer base and main footfall drivers – shoppers, tourists, office workers, students etc. all but disappeared and for extended periods of time.

It could be argued that COVID-19 merely accelerated the demise of well-known retail brands either unable or unwilling to adapt to rapidly changing market dynamic. This is especially true of many retailers from our nearest neighbours who also had to face the additional challenges of a Brexit troubled trading and supply chain environment. Whatever the causes, the recent spike in vacancy is unprecedented and much sharper that that experienced following the recession of the late noughties.

Today there are currently 15 non-trading units on Grafton Street (both upper and lower sections), representing a vacancy rate of 17% in terms of overall unit numbers. This includes 14 previously occupied units along with one unit currently being redeveloped by Irish Life. By comparison, our Colliers Retail Occupancy Tracker showed just 2 units vacant as of February 2020. The equivalent rates in the main Dublin shopping centres and retail parks are sub-5% and sub-2% respectively. In our opinion, the 17% figure is somewhat misleading and overstates true vacancy levels. When looking at ‘high street’ locations and in particular Grafton Street, the overall vacancy in retail floor area terms is a better barometer as unit sizes are substantially smaller than those in shopping centres and retail parks. When Grafton Street is looked at in these terms, the vacancy rate is far lower at 10.3%.

We are now (hopefully) in a post-COVID era with our economy rebounding surprisingly well and any concerns around any long-term structural damage to our economy beginning to abate. The fundamentals of Grafton Street as a retailing location have not changed, and what we missed in the last two years apart from shoppers was trading shops. Indeed, only one new retailer, athleisure brand Lululemon, opened on Grafton Street during the entire of 2020 and 2021.

Following the last recession, a wave of new international retailers including Hugo Boss, Massimo Dutti, Levis, Space NK, Ted Baker, & Other Stories, Dune, The White Company and North Face opened for business on the street. We expect a similar influx of new occupiers this time around. LEGO have already announced they will open later this year at No. 41 and Russell & Bromley have just signed a lease at No. 76.

In addition to LEGO and Russell & Bromley, we are aware of at least 5 lettings currently in progress on Grafton Street and once these complete, vacancy levels will immediately drop from 17% to 11% in terms of unit numbers and from 10.3% to 7.1% in terms of retail floor area. This is a conservative estimate of leasing activity, and we fully expect to see additional transactions advancing in the coming months which will bring vacancy even lower by year-end. No doubt, overseas retailers have noted the success of Lululemon since its opening just over six months ago which will support their view that Dublin is a key location in any international expansion programme.


Retail Thought Leadership June 1024 x 972

The future of Grafton Street is bright

Read on IrishTimes.com
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Eoin Feeney

Director | Retail

Dublin

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