Northern Ireland's retail market boosted by new arrivals and flexible landlords
As we move into the last quarter of 2014, the Northern Irish market is finally showing signs of growth. There is an increase in consumer confidence, a wider economic stability, more realistic retail rents and a willingness on the part of landlords to offer more flexible terms and greater incentives to retailers as significant contributory factors.
Belfast city centre has witnessed a notable decline in vacancies having welcomed a number of brand new retailers in recent months.
These include SimplyBe/Jacamo, Joules, Pepperberry/Bravissmo, Dr Martens and childrenswear retailer, Jojo Maman Bebe, which is now located on the Lisburn Road.
Victoria Square continues to dominate the high-end retail element within Belfast city centre.
However, as a direct result of the enhanced footfall it has created, surrounding streets such as Arthur Street have also benefited greatly and the latter is now at full occupancy.
The long-standing CastleCourt shopping centre is also doing well and has been boosted by the arrival of SimplyBe/Jacamo and Toys R Us which has opened its first city centre store within the scheme as it seeks to roll out its smaller store format over the coming months.
There is also considerable speculation that fashion retailer Zara is set to expand its existing McAuley House flagship store with Trespass having relocated to Arthur Street on a move facilitating the former.
It's encouraging to see new entrants into the market as well as a reduction in vacancy levels and there is no doubt that much of this is attributable to changes within the market relating to rents, more realistic arrangements between landlords and tenants and anticipated rates reduction.
For example, on Donegall Place we have seen headline Zone A rents more than halve in the past seven years.
Meanwhile, we have also witnessed a greater willingness on the part of landlords to offer flexible lease terms and greater incentives such as extended rent-free periods, tenant break options and shorter lease terms, all of which have helped beleaguered retailers considerably.
The Irish retail market is experiencing a remarkable resurgence in consumer spending power and a sharp upturn in retail sales, so I am cautiously optimistic that similar trends could emerge here as consumer confidence and the economy grows.
Rents have now largely stabilised in most established locations and the ingredients for growth are beginning to materialise. 2015 will be an interesting year for retail as we experience the effect of a rebalancing of rates and a potential bounce in rents, particularly in town.
Gareth Howell is retail director with commercial property agents Osborne King