Over the past number of weeks there has been a lot of focus and publicity in relation to the demise and fate of the retail market and in particular the increased vacancy of units on St Patrick’s Street in the city centre, Cork and Munster’s premier retail high street as well as in suburban shopping centres.
Much of the blame in relation to this has been laid at the feet of the Coronavirus but in truth the occupational retail market has been under serious pressure and has been changing for some time.
There is no doubt that the closure of all retail and associated uses since the advent of Covid-19 has had a devastating effect on business and cashflow for both tenants and landlords alike. Many retailers/occupiers that were finding the going difficult in the months/years leading up to the lockdown simply could not and cannot sustain the losses suffered as a result.
Rent relief requests
Rent relief requests and demands have been received by nearly all landlords from their tenants seeking rent payment abatements/waivers in order to assist them through these turbulent times. In my opinion, collaboration and cooperation between landlords and tenants is essential in order to secure the future for both parties.
Negotiations must be balanced, and exploitation of the system must not happen on either side as it is important that both parties share the pain in order to stay operational and face the future with optimism. The return to trading has got to be on a softly-softly basis, with rent relief reflecting that social distancing and queueing remains a requirement that turnover is likely to be significantly reduced for sometime before the “new norm” is established.
Thankfully it has not all been bad news for the retail sector as some stores have continued to trade well over the post months albeit with increased costs. The supermarket and convenience business have traded well and some retailers, more than others, have had a lot of success with online sales.
Information from our colleagues across Europe, particularly in Italy and Spain, would suggest that footfall figures on high streets and shopping centres has varied between 35% and 50% of pre-Covid levels.
The demise of Debenhams has been widely publicised and was very much at an advanced stage in advance of Covid-19. The stores that have been vacated by Debenhams are generally in pivotal positions on high streets and in shopping centres and due to their profile will be re-occupied or redeveloped. The worry is the shortage of possible replacements for these stores.
If one is to look at the store formally occupied by Debenhams on St Patrick’s Street in Cork (still locally referred to as Roches Stores!), this store comprises in excess of 155,000sq ft, arguably the best profile in Munster not to mention in Cork City. Most other anchor stores are already represented in Cork city centre. Sports Direct, being the new entrant into the market, has recently purchased the Easons store, and it remains to be seen what brand from that group is to be represented there. The reality is that the former Roches Stores will probably require redevelopment and re-purposing to suit the new market that we find ourselves in, with mixed uses that are ancillary to the primary use being retail fronting onto Patrick Street in order to make it work commercially.
St Patrick’s Street
The level of vacancy on St Patrick’s Street over the last couple of years has been low with the majority of vacancies being in smaller units at either end of the street. We suggest that we use these changing times as an opportunity for the planners to consider a relaxing of restrictions in relation to uses for some of these units.
These could include restaurants with outdoor covered seating and/or other community-based activities. It would be great to see these units occupied with uses currently not permitted on the street. You only have to look at other European cities to see that this model works and also keeps the street alive for longer periods than the usual retail hours. The Local Authority has to work harder to ensure the vitality of St Patrick’s Street, as the remainder of the city centre feeds from it.
There has been a lot of publicity as to the plight of St Patrick’s Street and the amount of units closing.
However, this needs to be put into perspective. Those retailers that have closed were in difficulty and suffering well in advance of the Covid-19 pandemic and some of the closures are strategic.
The redevelopment of the long-vacant A-Wear building is now completed with JD Sports opening a new superstore as an extension from their store within The Savoy out onto the street. This will be a super addition to the street.
Easons, immediately adjacent to JD, have sold their building which they have now vacated. As a result, it is expected that Easons will relocate elsewhere on S Patrick’s Street or Opera Lane.
No 83/85 St Patrick’s Street was vacated by Vila/Selected from the Best Seller Group pre-Covid and we have interest in that store from two international retailers, neither of whom have previously had representation on Patrick Street.
Monsoon’s exit from Patrick Street has been expected for some time and that block to include the former Victoria Hotel overhead now has planning permission for a new development.
There is interest in St Patrick’s Street at present from new retailers. Yes, vacancy has increased during the pandemic but that was inevitable given the effects of the virus, coupled with the changing face of retail activity. The fundamental message is that the market will adapt, people will want to shop and if landlords and retailers can collaborate and cooperate with each other our high streets will continue to thrive.
It has been good to see the reopening of retail units across the city and suburbs with good trade reported from retailers on St Patrick’s Street and Opera Lane as well as Mahon Point Shopping Centre and Mahon Retail Park.
It is important for business communities to come together and a prime example of this has been the success
of the Victorian Quarter and the emergence of MacCurtain St over the last number of years. It is fantastic to see the activity on that street with the former Windsor Inn now being developed as a new boutique hotel and so many restaurants and pubs trading well and promoting the area as a joint force and this has led to new brands on the street to include The Glass Curtain and Thompsons Bar & Restaurant.
This has principally been driven by Cork businesses and other streets and areas should take a lead from this. A good example of this is the enthusiasm and positivity displayed by Eddie Mullins of Fitzgeralds Menswear on St Patrick’s Street: more should be encouraged.
Main streets of towns, in my opinion, need to revert in some way to what was the norm in the 1970s and 1980s where the majority of outlets were indigenous local traders such as locally run fashion boutiques, fruit and veg; butchers; dry cleaners etc which were dependent on the support of the local community. This, however, will require an adjustment in some of the rents being received by landlords.
This also applies to secondary and tertiary retail locations in our cities where, for example in Cork, North Main Street had a lot of local traders historically – this needs to be reintroduced with Local Authority/Government-incentive led support for local business ventures.
Online retailing has become more and more prevalent and the property led retail business needs to accept that. Is is going to have to adapt to it as it is not going away. It needs to be embraced.
However, equally, retailers must accept that the physical property and browsing is still critically important to the retail market and that retailers need to work with Landlords and property owners to try to have a commercial solution that is economical for both sides. A lot of retailers are currently trying to re-gear their leases by introducing turnover only rents that exclude online sales figures.
Whilst that is entirely understandable, the click and collect model will then be pushed further by those retailers which will lead to very low rents being paid as consumers will be encouraged by those retailers to browse, buy pay online.
Little new development
One thing that is obvious is that there will be little, if any new retail-led development for the foreseeable future other than opportunity-led re-development or extension of existing facilities.
Peter O’Meara is a director with Savills, Cork