Shoppers of an unusually adventurous variety flocked to the Jervis shopping centre last week, and no, they weren’t there for the latest fashion trends or overpriced lattes.
Up to 13 eager first-round bids were flung at the Dublin city centre mall, which its owners, Paddy McKillen and Padraig Drayne, had quietly decided was “for sale” — presumably in hopes of attracting attention without blowing a trumpet. Spoiler alert: they succeeded.
This marked the shopping centre’s debut on the market since it was developed back in the ’90s by McKillen, Drayne, and the elusive yet business-savvy Paschal Taggart. Yes, it’s one of the last remaining gems from that golden era, and it proudly wears the “still-owned-by-the-developers” badge like a vintage wine bottle from your parents’ cellar.
Among the eager bidders lurked heavy hitters like the Comer Group and US property investor Hines, who apparently believe shopping centres have more charm than your average hedge fund meeting. Also rumored to be in the mix were Lugus Capital, Patron Capital, and a bevy of others, perhaps eyeing a deal that could save them a good few million euros to blow on more lucrative ventures, like, I don’t know, Monopoly?
The auction frenzy was a delightful contrast to the recent barrage of strong bids for Marlet’s retail parks scattered across Dublin, Louth, and Tipperary, which themselves received ten initial bids — all while leaving the thrill of scoring a winning lottery ticket feeling a tad pedestrian.
For over a year now, retail has managed to snag the spotlight in the property investment market, attracting a hefty sum of capital like a moth to a flame. While other sectors—like office spaces, which are currently as popular as a public speaking gig at a family reunion—are struggling, retail seems to be on the upswing faster than you can say “post-COVID revival.”
Estate agents, those brave souls, reported that within the first three months of the year, retail stealing half the value of all deals here is not just impressive; it’s practically a triumph worthy of a standing ovation. Retail parks, in particular, are in the spotlight like they’re competing in “Dancing with the Stars,” all while investors cheer from the sidelines, cash in hand.
Adding to the drama, US real estate giant Realty Income, which isn’t just hoarding cash from snacks at the Bellagio casino, has been on a shopping spree of its own, snatching up eight retail parks from Oaktree Capital for a sum so jaw-dropping, it has yet to be fully processed by mere mortals. This brings us to the conjecture that perhaps bricks-and-mortar shops are alive and kicking, defying the mass predictions of their demise, as they rise Phoenix-like from the esports ashes.
Statistics from the first quarter reveal a resounding “boo-yah!” moment for long-forgotten shopping habits, showing a 2% increase in in-store spending year-on-year. The EY Future Consumer index, meanwhile, discovered that seven in ten consumers still prefer the good old-fashioned charm of bricks-and-mortar shopping for everyday items. Take that, so-called “experts”!
Jean McCabe, the chief executive of Retail Excellence Ireland—or as I like to call her, the Retail Whisperer—shared that customers are “returning to stores for the customer experience.” Imagine that! People like actually interacting with actual humans while shopping! In this brave new world, retailers are hastily opening new stores, determined to spread their wings and achieve economies of scale like it’s some sort of competitive sport.
Brendan McDowell, founder of BPerfect Cosmetics, once started his empire selling online (not that we all haven’t dreamt of being internet tycoons). Fast forward five years, and he’s opened 13 physical stores across the UK and Ireland, insisting that pop-up stores were the perfect way to test the waters. “Why not dine on the buffet of retail before committing to the à la carte?” he mused. The result? Sweet success, as McDowell revealed that negotiating better rent and terms was a walk in the park—just without the actual park.
And of course, the retail parks are becoming hotcakes again, luring institutional buyers like bees to honey. The yield on prime shopping centres could hit 6%, which sounds delectable enough to lure anyone’s attention even in the world of finance. Max Reilly, a capital markets wizard, hinted at an impending “inflection point,” which, if it were a stock market trend, sounds like it’ll have all the thrill of waiting for an oven to preheat.
So while the dust settles and new stars emerge in the retail firmament, it’s clear that resilient retailers are hungry for fresh opportunities. After all, the closure of stores isn’t the apocalypse; it’s the sweet opportunity to spice things up and welcome new brands into the fold. Resilience is retail’s new mantra, and wouldn’t you know it, every closing door opens a window—at least, that’s how it works in a sitcom.
