Retail rents expected to rise

The Government's Retail Planning Guidelines will result in an increase in retail rents over the next five years, according to three-quarters of respondents to a retail survey conducted by Hamilton Osborne King.

A postal survey of 400 clients including retailers, developers and investors - which received a 15 per cent response - was intended as a climate poll to discern current market expectations.

Over 60 per cent believe the guidelines will lengthen the time taken to secure planning permissions. Optimism is running high with regard to the trend in retail sales over the next five years, with 85 per cent of respondents envisaging an upsurge in the volume of sales up to 2006.

Ireland's young demographic profile - 40 per cent of the population is aged under 25 - is further cause for a positive outlook, with 85 per cent envisaging an increase in sales. More than three-quarters, however expect no impact on the European tourist spend as a result of Euro transition.

E-tailing, once anticipated as a threat, is no longer regarded as such, with 69 per cent of respondents expecting no change in the demand for retail space in the coming years. However, 15 per cent are less dismissive of its potential impact and expect a decline in the call for retail space. According to Hamilton Osborne King managing director Aidan O'Hogan, apart from a few exceptions, e-tailing is "not really working".

While the anticipated rise in rents as a result of the Planning Guidelines is good news for developers and landlords, it is a sobering prospect for tenants.

The report also found that there is a growing requirement for retail space, that out-of-town centres seem to be a marginally more favoured option, and that retailers foresee a need to increase the average size of shops. The findings, according to O'Hogan, will be "of interest to institutional investors in that it predicts continued retail growth".