A total of five major shopping centres have sold in the last 18 months in Northern Ireland, making up some 40% of the total investment market here during that period. David McClure, managing director of Osborne King, says retail is returning to growth with new faces around the corner in the months ahead
Through experience, one realises that there is little new in business as indeed life and that all things are cyclical.
This is certainly true of the property market and while the characteristics of the cycle are never identical the similarities are generally so striking it is clear they belong to the same fundamental pattern.
In this context a quiet transformation of the local property landscape has occurred over the past 18 months or so. As with any market, activity revolves around transactions and when one examines the retail investment market in particular an interesting pattern is observed.
Five major shopping centre assets (Rushmere, Forestside, Foyleside, Bloomfield and The Quays) have been sold over the approximate period in question accounting for around £150m in sales with all but one having been snapped up by locally based private investors.
The level of activity is striking and accounts for almost 40% of the total investment activity in that time. Furthermore, several other such assets currently held by UK based entities are expected to be coming to the market over the coming months and one would anticipate that local privates will continue to dominate the buyer pool.
There is a strong perception therefore that we have reached the bottom of the retail market, and it is clear looking at the wider UK economic data that consumer confidence is improving, and with inflationary pressures appearing to ease this trend should continue as we move into the second half of the year.
Within this context, retailers themselves are keen to expand and invest in their portfolios and this has also led to new entrants appearing in the local market such as Deichmann, White Company, Miniso, Dylan Oaks, and Marella to name a few. The Food and beverage market also appears in rude health with fresh faces such as Pret A Manger, Popeyes, and Mary Brown’s all expanding into the Northern Irish market, not to mention the exciting prospect of The Ivy coming soon to Donegall Place.
Suddenly, the supply and demand equation has altered in many of our strongest retail destinations. This has resulted in a stabilisation of rents, presenting a clear platform for growth for the first time in a generation in many retail locations. Our hardy indigenous investors have spotted the opportunity, seized assets at remarkable value and importantly are prepared to invest further to improve the tenant mix and general customer experience.
The resultant effect, is a more sophisticated and attractive retail environment, generating increased footfall and encouraging greater dwell time. One only needs to look at the investment in Lesley Forestside in the past six months to see fantastic progressive examples of this very strategy in action.
The Herbert Group’s thoughtful ‘hands on’ approach has swiftly led to a ‘fully let’ retail mall and the construction of four restaurant units scheduled for handover to tenants this month. The new units are let to household names and complement the existing offer, greatly increasing the attractiveness of the scheme from a customer facing perspective.
Whisper it quietly but the retail revival is well under way, and is gathering quickening momentum – the real manifestation of this will be clear for all by Christmas 2024 as we confidently predict a fully let Donegall Place for first time in more than 10 years, a raft of ‘new faces’ and dramatically modernised and enhanced major shopping centre assets throughout Northern Ireland.