Prime malls and shopping streets awaiting rebound

State aid to households and businesses, along with the strong performance of Irish multinationals, mitigated the effects of Covid-19 and provided a solid platform for recovery once the economy reopened last spring. The post-containment rebound has been stronger than expected. Employment grew 9.9% in the year through June, with nearly all of Covid’s job losses recovered. At the same time, output rebounded with 16.3% year-on-year GDP growth in the first half of 2021.

The consumer

Income supports have protected vulnerable workers from the worst effects of the pandemic, and in the wider labor market, incomes are currently increasing by 3.9% per year. With spending reduced by the lockdowns, Irish households deleveraged by more than € 9 billion between February 2020 and September 2021, while savings deposits increased by € 22.75 billion over the course of the same period. This creates leeway for a rebound in spending, assuming consumer confidence holds.

Graph: <a class=Sales trends by type of store over the past two years. Essential retailers selling groceries, pharmaceuticals and fuel have held up well as these stores have remained open throughout the pandemic” height=”348″ src=”!/image/image.jpg_gen/derivatives/landscape_620/image.jpg” width=”620″/>

Graph: Sales trends by type of store over the past two years. Essential retailers selling groceries, pharmaceuticals and fuel have held up well as these stores have remained open throughout the pandemic


Retail sales rebounded after the stores reopened last spring. Inevitably, the pace of the recovery has slowed in recent months with the resurgence of a more normal business environment.

The graph (see graph) shows the sales trends by type of store over the past two years. Three groups are evident. Group one includes “defensive” retailers selling essential items; grocery stores, pharmacies, hardware stores and gas stations. Sales have held up well throughout the pandemic, with those stores remaining open.

Group two includes non-core retail outlets, such as furniture and fashion stores. These have been affected by public health restrictions resulting in low sales during the lockdown. However, trade rebounded strongly once the economy reopened.

Finally, the recovery from the contraction of the third group, which includes bar sales, was delayed due to the reopening of indoor restaurants in July.


Internet sales have grown steadily as a proportion of total card sales between 2016-2019. However, consumers had to migrate online during the lockdowns. As a result, e-commerce sales reached nearly 70% of total spend in 2020 and 2021. While it’s too early to call a trend, the latest data suggests a return to traditional retail channels in the face of face with the reopening of stores.

Occupant market

Main Street was the hardest hit area with closures decimating footfall and store spending. This, along with Brexit, British Company Voluntary Agreements (CVA), etc., have resulted in an increase in the number of vacancies. However, we are encouraged by the depth of demand for active occupants on shopping streets and malls (also affected by the pandemic, albeit to a lesser extent).

A notable trend is the “direct to consumer” retailer. These international brands control their entire manufacturing and sales process, through online retailing and retailing in company-run stores. Lululemon, which recently opened at 84 Grafton Street, is a case in point. The upward trend continues as physical retailers embrace the omnichannel approach and need more space to accommodate click-and-collect sales.

As Main Street and malls have been put to the test, retail parks, supermarkets and neighborhood centers have shown resilience with minimal disruption to the supply chain.


Grafton Street rents fell 17.4%, from € 6,189 per m² (€ 575 per square foot) before Covid to around € 4,496 per m² (€ 475 per square foot). Larger drops of 38.9% were seen on Henry Street where Zone A rents are around € 2,960 per m² (€ 275 per square foot). The prime shopping center sector has also seen rents fall, but not as sharply as on Main Street. There will inevitably be a rebound once retail users begin to refocus on opportunities for growth and expansion.

The other major retail asset classes, grocery stores and retail parks, have shown their resilience in the face of Covid-19 and the rise of online. These sectors saw good user activity and signs of growth in rents. It should continue.


The economy is experiencing significant momentum and forecasters have revised their employment and production projections upwards. Consumer spending is expected to rise 6.8% in 2021 and 9.6% next year (assuming there are no more bottlenecks and consumer confidence is preserved).

Ireland will remain a lucrative destination for international retailers. Vacancy figures for prime malls and shopping streets will drop significantly in 2022 as existing retailers continue to expand and with the arrival of new entrants into the market. Expect some exciting new names in this space. We expect the decline in rents to ease in these sectors, but it is too early to report a rebound in rents in 2022. We remain positive on the rental outlook for commercial parks and grocery stores, which remain the commercial sub-sectors. the most resistant.

Eoin Feeney is Deputy Managing Director and Head of Retail at BNP Paribas Real Estate Ireland

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