Retail recovery is not uniform

Researcher Dr John McCartney said with disposable incomes per person 20 per cent higher in Dublin than in other regions of the country this was leading to a two-tier market, with most retail activity concentrated in prime high streets and shopping centres in Dublin.

In contrast, vacancy rates remained elevated in some provincial towns.

The report said that with employment up by more than 3 per cent in the last year this was feeding through to improved consumer confidence and was beginning to be seen at the tills.

The consumer sentiment index had risen by over 60 per cent in the last 12 months, and is now at its highest point since June 2007.

Reflecting this, the household savings ratio had halved since its peak in 2009 and, at 8.4 per cent, was well below the EU average.

Bernadine Hogan, divisional director of retail, noted that consumer electronics and footwear and fashion retailers were currently among the most active in the market.

There was also demand arising from the food and beverage sector. “We are currently seeing increased demand from food and drink retailers for prime city centre space, with requirements currently outstripping the available stock.”

Savills expects prime retail rents to stabilise and grow in some locations during 2014. However, it says this trend will not extend to secondary locations where rents will continue to soften and further tenant incentives will be offered as an inducement to take space.