Retail sector 'benefitting from increase in number of full-time jobs'

The Irish retail sector is enjoying a positive knock-on effect as more jobs move from part-time to full-time status, according to a new report from property consultants Savills Ireland.

“Overall, 76,600 new jobs have been added in net terms since the low point in Q1 2012, but the structure of employment growth has also been changing,” said Dr John McCartney, economist and director of research at Savills Ireland.

“We are now seeing part-time jobs being converted to full-time employment as the recovery becomes more deeply established. As a result, consumer confidence and disposable incomes are improving.

“This is feeding directly through to the tills with retail sales up 8.6% in July, the ninth consecutive month of growth”.

Commenting on the retail property market, Savills say that the demand for retail space in Q2 focused on prime high streets and shopping centres both in Dublin and in the main regional cities – where there was an increase in store openings.

“Improving sentiment and sales have seen demand for retail space rise significantly, with competitive bidding for prime properties becoming commonplace,” said Larry Brennan, chairman and head of commercial division at Savills.

“This in turn has led to rental increases in prime locations. Currently, Zone A rental values are between €4,000 and €5,000 on Grafton Street and €3,500 and €4,000 on Henry Street”.

However, Brennan said that this pick-up in activity has not yet been reflected outside of the main urban centres.

“Despite stronger activity on the ground, relatively few new entrants have come to the Irish market. Moreover, of these new arrivals, the majority are focusing on prime Dublin locations,” he said.

“However, as jobs growth and the housing market recovery diffuse from the main urban centres there will be a gradual improvement in regional markets.”

The firm said that it expects prime high street and shopping centre space to remain in demand – resulting in rents increasing and incentive packages tightening in these areas.

The report also states that retail investment sales are likely to continue – with NAMA taking advantage of the shift in investment focus towards retail – buoyed by the improving retail economy.