Economy gets thumbs-up

ONE of Europe’s top fund managers yesterday said the future of the Irish economy is bright.

Andreas Schreurs of German investment firm, Deka Immobilien, said the economy will continue to deliver stable growth over the next two years having achieved strong growth in previous years.

Mr Schreurs said Ireland retained a very good retail investment profile for a number of reasons: there was huge potential for growth in consumer spending, rents had risen substantially and there was a lack of retail space.

He said for that reason, Cork was the ideal location for funding by Germany’s largest open-ended fund which has 16 billion under management. Ireland’s GDP growth was still beating most other economies and it enjoyed a low 4.4% unemployment rate last year, he said.

Mr Schreurs was addressing the annual breakfast briefing of Dublin property specialists, CB Hamilton Osborne King.

Mr Schreurs said his fund looked for locations with a young and growing population, above average demand from international tenants and where quality retail space was under-provided.

Deka has provided funding for Mahon Point Shopping Centre in Cork, handled by Hamilton Osborne King for Deka on behalf of O’Callaghan Properties.

Mr Schreurs said a strong local developer was an important influence on the fund’s decision to back any project.

O’Callaghan Properties’ track record and experience comfortably met these criteria, Mr Schreurs added.

“We are very confident about the prospects for favourable growth and this has already been borne out in the letting negotiations where exceptionally strong demand for limited space is available in the centre,” Mr Schreurs said.

“The retail sector is performing exceptionally well with all new developments being substantially pre-let.”

Debenhams is agreed as the anchor tenant in Mahon Point and Tesco will be the main food retailer.

Aidan O’Hogan, managing director, CB Hamilton Osborne King said he expects the development to be pre-let.

The outlook for all areas of the commercial property market was discussed at the breakfast briefing.

Mr O’Hogan said cautious optimism was the prevailing mood for commercial property this year.

Mr Schreurs said the Irish economy was still underpinned by relatively good income growth and solid consumer spending. This has led to sustained demand from Irish and international retailers for good rental property to cater for continued demand by consumers for high quality goods. Th e retail sector will continue to outperform other sectors of the property market this year, Mr Schreurs said.