Irish shopping centres 'face much of the same pressures as UK counterparts'

Mahon Point Shopping Centre in Cork.

Shopping centres in Ireland may in time be sold off by their international owners because they were performing better than their British counterparts but have nonetheless experienced much of the same pressures during the Covid-19 crisis, according to a leading property analyst. 

Colm Lauder, senior retail estate analyst at Goodbody, said the experience of rent collection by large retail owners was remarkably similar in Ireland and Britain in recent months because they both face similar lengthy lockdowns.

The difference was that Irish retail was deemed to be performing better ahead of the pandemic than its British counterpart which may in time persuade the landlord owners -- property firms, property funds and pension funds -- to dispose of assets that are deemed to be performing better, Mr Lauder said.

“I do not see anything like that happening in the short term but these are international assets with an international ownership base and so decisions will be made on a pan-European level rather than an Irish-specific level,” Mr Lauder said.

On rents, Mr Lauder said that retail rents may not necessarily fall but that landlords may try out alternative models in linking  rents to the turnover of the tenant’s store.

His remarks come as British property group Intu may be heading into administration. Intu which does not own properties in Ireland has lined up KPMG as administrator in the event it could not reach a deal. It has a huge debt pile of £2.7bn (€3bn). 

Shares in rival property firm Hammerson, which owns half of the Dundrum Shopping Centre and is a substantial retail landlord across Ireland, slid 13% in the latest session.

That means Hammerson which also owns Brent Cross in London and Birmingham's Bullring has lost 68% of its value from a year ago. It is valued at £644m.

It also owns half of the Swords Pavillions 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. In recent months, it completed the sale of the Abbey Retail Park in Belfast.