Retail does give us some reasons to be cheerful
At present it is easy to be downbeat when considering the retail property sector and there is no doubt the market is difficult.
Weekly Business Digest Newsletter
At a macro level the uncertainty surrounding Brexit, a rise in interest rates and the impact of the internet are just some of the challenges the sector currently faces.
However, beyond the negative press headlines and despite the well documented woes of the likes of Toys R Us, Maplin and New Look the picture is not all bleak.
In the last year or so, even amid the political uncertainty in Northern Ireland, a number of new retailers secured outlets here for the first time including furniture store Neptune, stationery firm Smiggle, fashion firm Pretty Green and rugs business Kukoon.
Meanwhile, brands including Superdry, Sostrene Grene, Skechers, The Range, EZ Living, Trespass, Greggs, Specsavers and Starbucks all acquired new stores in the province.
The most recent RICS (Royal Institution of Chartered Surveyors) and Ulster Bank NI Commercial Market Survey, which reflects the final quarter of 2017, showed that Northern Ireland was one of only two regions in the UK to report an increase in occupier demand for retail property.
This followed a softening of demand in the previous two quarters, which would indicate that it was a mixed picture overall for Northern Ireland's commercial property market in 2017.
The latest survey also reported that the outlook for industrial rent expectations has picked up, bucking the UK trend.
The retail sector is constantly evolving and the growth in online retailing is the primary driver of the structural shift facing bricks and mortar retailing.
Retailers are increasingly recognising the important role the right environment plays for their customers and, with consumers being ever more demanding, those landlords who are proactive and work with their tenants to enhance the consumer experience are the most likely to survive.
The new look Dunnes Stores at both Forestside and Abbeycentre are examples of an exciting revamp of an anchor store where the landlords have helped create very attractive new stores which helps create a positive shopping environment.
Similarly, the arrival of The Range to Northern Ireland is another positive for the local retail sector. The home, garden and leisure product retailer is the new anchor tenant of Connswater Shopping Centre and is reportedly due to open more stores in Antrim, Belfast (Boucher Road) and Portadown among other locations.
Occupiers like The Range help to add significant footfall to a scheme due to the wide variety of products they sell and in turn this should help the trading performance of adjoining occupiers.
Good landlords are becoming increasingly aware of the need to create a positive physical shopping experience, and the expansion of leisure within a retailing environment has been an important development in traditional retail locations.
A better food and beverage and leisure offer will result in an enhanced shopping experience, attracting a greater number of customers, an increase in the time they spend there and ultimately a higher spend.
The recent introduction of Lost City Golf at Cityside in Belfast and pod restaurants pre-let to Nandos and Five Guys at Rushmere in Craigavon are simple examples of landlords adding to their tenant mix and widening the customer offer.
As for the future, the retail property market will continue to evolve as technology plays an ever increasing role and while there will continue to be both winners and losers we are still seeing many occupiers seeking new space in many locations locally. It is encouraging that we continue to see retailers from both the UK and Ireland considering Northern Ireland as a location in which to open stores for the first time.
- Jonathan Brown is divisional director, retail, at Savills and a member of the Royal Institution of Chartered Surveyors (RICS)