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Hungry for phase two

Liffey Valley has been held back by the lack of a food anchor, agents believe. So will the advent of a Tesco superstore, plus the planned second phase of the scheme, satisfy residents’ appetites? Lisa Pilkington reports

A lot can happen in a year. Grosvenor Estate Holdings’ 23,411m2 (252,000 sq ft) scheme is now celebrating its first birthday, but how has Liffey Valley fared since its launch? What effect has it had on neighbouring out-of-town schemes and has it lived up to Dubliners’ expectations?

Many believe that, despite a buoyant Irish retail economy, the centre has not traded to its full potential. One local agent feels its main problems are the lack of a supermarket, infrastructure hurdles and a mismatch between demographic profile and product. He says: “It’s firing on one cylinder at the moment. They’re trying to target ABC1s – they are not the indigenous population.”

Lambert Smith Hampton’s Finton Teirney agrees: “Liffey Valley’s built in an area with a low socioeconomic profile.” And he adds: “The lack of a supermarket is against the Irish psyche.”

Palmer McCormack’s Mervyn Ellis concurs: “It’s a unique concept in Irish retailing to open a scheme with no food anchor.”

But letting agent Hamilton Osborne King remains positive. The firm’s Chris Bogle says: “I can understand why people have been saying this, because the scheme hasn’t been performing as well as we’d hoped – but it’s a bit unfair. Liffey Valley is becoming a success; it isn’t as bad as everyone says.”

Meanwhile, the supermarket issue is being addressed. Long-running proposals for a Tesco superstore on an adjacent site are coming to fruition. Grosvenor’s development director Stephen Musgrave defends the scheme: “The supermarket has always been planned as an ongoing second phase; it’s coming through. We’ve got planning for a 5,110m2 (55,000 sq ft) store.”

And Grosvenor plans a 23,225m2 (250,000 sq ft) second phase, which is going through the appeals tribunal.

Footfalls going up

Musgrave says Grosvenor is happy with the scheme’s performance. “We’re very pleased; footfalls are going up all the time,” he enthuses. “The scheme’s performed as we would have expected.” HOK’s Bogle believes another factor that has helped attract custom is Ster Century’s 12-screen multiplex.

Liffey Valley has a rolling programme, with several elements coming onstream, explains Musgrave: “Phase one of the retail park is nearing completion; we’ve got planning for a 150-bed hotel, pub and motor mall.”

And it seems Liffey Valley has had no detrimental impact on other existing out-of-town retail centres, such as the Blanchardstown Centre and The Square, at Tallaght.

Palmer McCormack’s Ellis says: “Blanchardstown was expecting to take a hit at Christmas, but the figures were up – it’s held its own.”

The Irish retail market is on fire and the strength of demand for retail space is best reflected in the shopping-centre market. This is borne out by the fact that several out-of-town centres are planning substantial expansions.

At Blanchardstown, planning permission exists for a third anchor store of 11,148m2 (120,000 sq ft); both House of Fraser and Debenhams have shown an interest. Developer Green Property is also looking to expand the centre to provide an additional 9,290m2 (100,000 sq ft) of retail space.

Meanwhile, at The Square, Tallaght, a further I£70m mixed-use extension is planned, comprising 14,864m2 (160,000 sq ft) of retail, with restaurants, a hotel, 400 residential apartments, light-rail terminus and a millennium square. Stephen Murray from Jones Lang LaSalle says: “We want three more large-space occupiers – we’re in advanced negotiations.”

And phase two of Liffey Valley is expected to be completed by 2001, doubling the scheme size to more than 46,451m2 (500,000 sq ft).

Development work has started in Swords on the 23,226m2 (250,000 sq ft) Pavilion shopping centre, which will provide a retail base for the area. Dunnes Stores and Superquinn will anchor the scheme.

Meanwhile, plans for Castlethorn Development’s 92,900m2 (1m sq ft) Pye Centre development in Dundrum, which includes a 32,515m2 (350,000 sq ft) shopping centre, have suffered a major setback.

Planning authority An Boad Bord Pleanala turned down existing proposals for the I£190m development because of the style and scale of the building – considered to be out of character with the existing development in the area.

However. the developer has promised to resubmit plans for a I£200m complex within “weeks rather than months”. Originally, both Tesco and Marks & Spencer were interested in the retail element of the scheme.

In the city centre, scarcity of supply is artificially depressing rental values, and the high street retail market on all sides is governed by a shortage of supply. Murray says: “Premiums are around I£400,000 for Grafton Street, and rental levels at review are about I£215 per sq ft. But because of the lack of open market transactions, this distortion in the city centre market is likely to continue.”

Ripple effect on neighbours

This acute lack of space on Grafton Street has created a ripple effect, with neighbouring streets such as Henry Street and South Ann Street seeing more activity and taking higher rents.

And Morrison Developments’ plans for the mixed-use 8,026m2 (86,400 sq ft) Moore Street Mall will alleviate retail space shortages and provide space for hungry UK and international retailers such as Arcadia, HMV, Gap, Mango and Boots. The scheme will be situated on the corner of Parnell Street and Moore Street, close to the prime retail area of Henry Street.

But the overall lack of space south of the River Liffey has had a positive knock-on effect north of the river, where developer-led proposals are planned for the more secondary salubrious O’Connell Street.

The area is in desperate need of a department store. JLL’s Murray believes this to be the only city-centre location associated with an existing retail pitch where a department store could go. “It would be the catalyst for development in the area,” he says.

There are several plans for the area, which include proposals for the Carlton Group’s 39,948m2 (430,000 sq ft) Millennium Mall. The shopping and entertainment complex, on the Carlton Cinema site on Upper O’Connell Street, has been given the go-ahead.

The I£100m project is believed to be twice the size of the neighbouring ILAC shopping centre. However, there are plans to link the two schemes and extend the ILAC Centre with a new first-floor level, housing two anchor stores, where Dunnes Stores may take a 13,935m2 (150,000 sq ft) unit on three levels.

Meanwhile, Dublin is paving the way for the burgeoning retail warehousing market in Ireland. Around 27,900m2 (300,000 sq ft) will come on stream this year, at phase two of Blanchardstown Retail Park and Liffey Valley Retail Park West. This does not include a further 13,935m2 (150,000 sq ft) planned for phase three of the retail park at Blanchardstown.

Block on large retail parks

However, recent Retail Planning Guidelines will make retail park planning more difficult to achieve. They say stores should be a maximum of 6,000m2 (64,585 sq ft) – only in exceptional circumstances will larger proposals be permitted.

Consequently, future retail warehousing schemes will be smaller, thus pushing up prices, rents and land values. But the market should be fuelled by the number of UK retailers eyeing the country for space.

Declan Stone, from Colliers Jackson-Stops, finds the resistance from planners frustrating and illogical. He says it is probably “part of the scaremongering and exaggeration of the difficulties in the UK, as a result of out-of-town retailing”.

Development pipeline for Dublin

New development is required to satisfy demand from retailers

Scheme

Estimated size (m2)

Developer

Opening

Planning

status

Agents

1

The Pavilion

23,225

Flynn & O’Flaherty

Autumn 2000

Granted

Lambert Smith Hampton & Hamilton Osborne King

2

Ayrefield

11,613

Tesco

Oct 2001

Granted

3

Ilac

29,729

Irish Life

Spring 2000

Granted

Palmer McCormack

4

The Pye Centre

27,871

Castlethorn Construction

Subject to new planning

Refused

Hamilton Osborne King& Harrington Bannon

5

Stillorgan

20,439

Treasury Holdings

Subject to new planning

Refused

Palmer McCormack

6

Liffey Valley

20,903

O’Callaghan & Grosvenor Holdings

Autumn 2001

Applied

Hamilton Osborne King & CB Hillier Parker

7

Ashleaf

10,870

Primeview Company

Spring 2000

Granted

Lambert Smith Hampton & Mason Owen Lyons

Source: Lambert Smith Hampton

Leisure Temple Bar publicans get selective

With around 790 pubs in the Dublin area, it is easy to see why Temple Bar has established itself in the UK market as the party place to go on hen and stag weekends. However, Irish publicans on Temple Bar are not altogether embracing the trend.

Jones Lang LaSalle’s Stephen Murray explains: “Publicans in Temple Bar think they’re losing regular customers; they don’t want to encourage this. But it has been the making of the place. Publicans were happy to have the business; now they are being selective.”

Currently, restrictive licensing laws are hindering development. But major changes to these laws will help address the issue. When the new licensing act is passed early next year, operators can apply for a new pub anywhere in the country subject to the extinguishment of an existing licence.

Hamilton Osborne King’s Paul Collins says: “The new legislation is unlikely to have much impact on Dublin city centre, where planning for pub use is a real difficulty. We expect a number of new pubs on the outskirts of the city, however.”

The tight Irish pub community has proved difficult for UK multiples to enter. Stephen Murray from Jones Lang LaSalle says: “A standard format is unlikely to make as much money as an Irish pub. UK multiples could learn a lot from us – we have entrepreneurial flair and more flexible formats.”

Whitbread, Bass, Marston’s, J D Wetherspoon and Scottish & Newcastle are all believed to be eyeing Temple Bar and the Grafton Street areas, but so far have failed to get in.

Meanwhile, Morrison Developments has taken a 50% stake in the Moore Street Mall – a £60m hotel and retail complex. Morrison has formed a joint venture with local developer Shelbourne Development to create a 197-bedroom hotel.

However, hotel development in general, after rocketing in recent years, has noticeably slowed down as site values for residential and office use have become more enticing, says Collins.

Looking to the future, Colliers Jackson-Stops’ Declan Stone predicts the emergence of leisure parks in Ireland, like those in the UK, comprising bingo, leisure, health and fitness, restaurants, bars and family-entertainment centres.

Meanwhile, there is continuing interest from UK healthclub operators to locate in Dublin, says Collins. “At the moment the fitness market is dominated by Irish operators such as Total Fitness, but there are good opportunities for a further 6-8 units around the city, and in particular south-east Dublin.”

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