Retail sector thrives amid rising cost of living

Inflation was a key feature of the Irish economy in 2022 and this continued into 2023, driving up prices and impacting retailers and consumers.

We have also seen a spike in interest rates over the past year, and with all of these factors we would expect to see a slowdown (or even collapse) in the Irish retail real estate market.

The market is still vibrant, thriving and seems to be doing just fine. Thanks to vigorous recovery efforts from the unprecedented vacancy rates caused by the numerous retailer competitions due to the Covid-19 pandemic, many of our leading retail outlets, be they shopping streets, malls or retail parks, are now fully occupied or approaching full occupancy.

Pessimistic predictions about physical stores losing out to online shopping, as published by lazy and uninformed commentators, have been proven wrong.

What is driving the market?

The retail market is like any other market with its own forces of supply and demand. Demand has real depth, as evidenced already this year by the arrival of many new international brands from a variety of countries including the US, Canada, China, UK, France, Denmark, Germany, Sweden, Brazil and Portugal amongst others.

Why is Ireland and Dublin in particular seen as such an important retail destination for these new brands, and why do we believe the market will remain strong? The answer is multifaceted, with several factors playing a role, including:

• Our economic fundamentals - GDP growth, historically low unemployment and household savings - are the envy of our international partners, with GDP growth forecast at 3 percent in 2024.
• We do not have an excess of retail space, and nothing new has been built in the last 15 years.