Shoppers of a peculiar breed flooded Jervis shopping centre last week, a veritable stampede of capitalism in action.
In what could be mistaken for a bidding war at a high-stakes poker tournament, up to 13 eager first-round offers were made for the Dublin city centre mall, which its owners, Paddy McKillen and Padraig Drayne, had quietly placed on the market. Apparently, subtlety is not anyone’s strong suit in commercial real estate.
Believe it or not, this is the first time the shopping centre has been up for grabs since its developers (McKillen, Drayne, and their mysterious accomplice, Paschal Taggart) turned it into a retail paradise in the 1990s. It’s practically an antique in a world of fast fashion. One of the last remnants of shopping centres from the ’90s that the original developers still control—how quaint.
The bidding roster includes the likes of the Comer Group, the US property magnate Hines, Peter Horgan’s Lugus Capital, and Patron Capital. Quite the star-studded lineup, which begs the question: who needs Hollywood when you have Dublin’s commercial property scene?
Hot on the heels of Marlet’s recent trio of retail parks—which received ten initial bids—it’s clear that retail real estate is having its moment in the sun, despite the pandemic-induced gloom. While other sectors are still hanging by a thread, retail seems to be staging a comeback that would make a Phoenix jealous.
Estate agents enthusiastically reported that in the opening quarter of the year, the retail segment accounted for half of all deal values. Let’s put that in layman’s terms: if money talks, retail is shouting.
Meanwhile, US giant Realty Income, which casually dropped $950 million on the Bellagio Casino in Las Vegas this year, decided to place its chips on shopping. They picked up eight retail parks from Oaktree Capital in a €220 million deal, proving that even after peering into the abyss of online shopping, bricks-and-mortar is experiencing a renaissance—sorry, Amazon.
Statistics tell a different story from that of retail’s supposed demise. AIB reported a 2% increase in in-store spending, a figure that would make any economist weep with joy. And don’t forget, the EY Future Consumer Index revealed that seven out of ten consumers still have a soft spot for physical stores—apparently, nostalgia isn’t just for ’90s sitcoms.
Jean McCabe, the head honcho at Retail Excellence Ireland, waxed poetic, stating that shoppers are “returning to stores for the customer experience.” Newsflash: You can’t get a high-five from a website.
Retail parks and shopping centres are lovingly tuning their tenant mixes to feature more entertainment venues and food options—because who doesn’t want to snack while shopping? BPerfect Cosmetics founder Brendan McDowell, who opened 13 stores after testing the pop-up waters, noted that there was a time of a multitude of empty units. Turns out, all it took was a little strategizing and a sprinkle of optimism.
Retail parks are having a nostalgia trip back to institutional ownership, which is entirely relatable. They are now the hot new targets for international pension funds, looking to push aside private equity. Imagine the scene: retail parks strutting their stuff as desirable assets—like a runway model but more…well, retail-y.
And what about the skeptics who still mourn the demise of store chains? Fear not, dear reader! As Bannon points out, vacant stores often pave the way for exciting new brands, making room for the next fashion sensation with the speed of a TikTok trend. So while some stores close, the retail cosmos continues to rebirth itself.
If you had any doubts about the resilience of the retail sector, drop them now. The landscape may shift like quicksand, but there’s a new guard ready and raring to claim the retail throne. So next time you see a “For Lease” sign, remember: it could be an opportunity for some yet-unknown brand destined for greatness—or at least some amusing Instagram moments.
