Retailers affected by the pandemic negotiate rental discounts of up to 20pc
Retailers are negotiating rental discounts of up to 20pc in many cases, as they continue to be affected by Covid-19 restrictions.
More substantial discounts are being achieved by shops negotiating new lettings in certain locations, according to agents CBRE in its latest bimonthly market report.
“This is creating opportunities for those retailers that are in a position to commit to specific and strategic moves in the current climate. As more leases are signed in the retail sector over the coming months, this will recalibrate the tone of rental levels and offer greater transparency,” CBRE said.
The Covid-19 pandemic has, over the past year, wreaked havoc on a significant proportion of street retailers, many of whom were already facing difficulties due to the rise in online shopping.
Until the retail sector is back trading in a meaningful way, it will be difficult to gauge the full extent of the impact that Covid-19 has had on the high street and retail schemes throughout the country, the CBRE report says.
The demise of many UK retailers, in particular Debenhams and the Arcadia Group, has left a “noticeable gap” in the commercial property market here, according to the report.
The closures of these stores, which included TopShop and Dorothy Perkins, has significantly increased vacancies in many schemes and retail locations.
Meanwhile, there has been a “notable increase” in retailer demand for shops since the start of this year. Grocery and convenience retailers, the majority of whom have been able to remain open during the Level 5 lockdowns, are especially active.
The commercial property market remains calm overall, with a more positive outlook for the second half of this year, according to the report.
There is a particularly strong appetite for industrial and logistics property, while demand for investment in homes in the private rental market continues.
Marie Hunt, head of research at CBRE Ireland, said: “The property market is hopeful that an end is finally in sight and that a busier second half to 2021 is now in prospect.
“Pricing has been relatively consistent over recent months and investor demand for Irish property remains strong, which is very encouraging.”
The Dublin office market has been more subdued than normal during January and February, the report has found.