High street vacancy rates up in most centres

High street vacancy rates in all but three urban centres rose in the last six months, while rents in Dublin city centre continued to climb in line with increased demand.

An improvement in retail sales and occupier activity throughout 2014 has been reflected in prime rental growth in some of the main Dublin retail areas, said commercial property consultants CBRE.

This is in stark contrast to the majority of other high street locations covered by the survey, which saw vacancy rates climb even as the capital’s recovery continues.

Outside of Dublin, Athlone was the only other centre to see vacancy rates fall, while Galway remained stable.

A lack of available prime units to satisfy the increase in demand from international retailers on Dublin’s Grafton St, where the retail vacancy rate now stands at 3.2%, has caused prime Zone A rents to increase to €4,500 per square metre per annum, while prime rents in Dundrum Town Centre increased to €4,000.

CBRE Ireland senior director of retail Simon Cooper said the survey highlights the folly of the Government’s proposed tax on vacant retail units.

“Interest in the Irish retail sector has certainly increased over the last number of months, with more international retailers continuing to circle the dew retail properties that are available in prime locations,” said Mr Cooper. “However, this trend has not yet filtered down to regional locations or those with continued high vacancy levels, where owners of retail properties are struggling to attract occupiers.

“This is why we would find it hard to believe that the Government are proposing planning policy changes which could see the introduction of a tax being imposed on these owners of vacant retail premises.”

Limerick has the highest retail vacancy rate in the country at 18.6% — up 2.3% on six months ago — closely followed by Cork on 18.2% and Sligo — which saw the biggest increase of 5% — at 17.5%.

Athlone, which saw its level of vacancies decline by almost 6%, has the next worst rate at 15.9%, followed by Kilkenny (6.6%), Dublin (5.8%), Killarney (2.9%), and Galway (2.8%).