Analysis: Irish shop landlords face the same challenges as their retail tenants

it will be very challenging to find new tenants for the shuttered Debenhams stores, at a time when other retailers may be looking for an exit from well-known shopping streets.  

The huge blows this week taken by Irish city retailing with the demise of two British retail giants will also be felt by the retail landlords, an expert has warned.

Goodbody head of retail estate analyst Colm Lauder said much of the same challenges long facing British retailers and landlords will be felt in Ireland too. 

The UK's Arcadia which operates in large swathes of Irish city and town centres, with names that include Topshop, Topman, Dorothy Perkins, Wallis, and Miss Selfridge, was forced to seek court-appointed administrators in the UK and Ireland in recent days. Unions now fear that up to 900 jobs are at risk in Ireland alone if Arcadia fails to secure a buyer.             

Debenhams, which sparked a political furore earlier this year when it shut all its stores in Ireland even as it continued to sell products online, collapsed altogether this week. It said it would close down all its 124 outlets and its online store in the UK, which together employ 12,000 people. 

Mr Lauder said though Irish retailing had been a little bit more resilient than the UK, the same challenges as long faced by retailers and landlords in the UK are mounting here too.

"There will be challenges for all of Ireland's leading shopping centres," Mr Lauder said. He said up to 20 retail leases on Grafton Street have no longterm tenants and leading shopping streets in Cork and other cities and towns face similar long-term challenges. "The challenges won't be that different to urban centres and town centres than in the UK," he said.  

Mr Lauder said that Dundrum, which at 140,000sq metres is Ireland's largest shopping centre, has fared well even during the Covid-19 lockdowns because it has essential traders which weren't forced to close in the lockdowns. It appears to have had posted a good level of footfall since the first lockdown ended in the summer, he said. 

Blanchardstown in Dublin, owned by private equity firm Blackstone but which looks set to be acquired by Goldman Sachs, is the second-largest centre in Ireland, while Mahon Point is Munster's largest.

Shares in retail British landlord Hammerson, which owns half of Dundrum and also owns Brent Cross in London and Birmingham's Bullring, have risen in the past week despite the news of the latest big retail casualties. 

Its shares nonetheless have slid by over 80% from a year ago, as the Covid emergency added to longer-term problems for its British retailing tenants, in particular. 

Hammerson also owns half of the Swords Pavilions and the Ilac Centre in Dublin city centre, and controls the nearby 1916 battlefield site, and has a significant minority stake in the Kildare Village. At the start of the year, it had completed the sale of the Abbey Retail Park in Belfast.

Mr Lauder said it will be very challenging to find new tenants for the shuttered Debenhams stores, at a time when other retailers may be looking for an exit from well-known shopping streets.