Retail and Entertainment Product Council - ULI Europe
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www.europe.uli.org
Retail and Entertainment Product Council
Dublin – September 2018
Overview
The retail and entertainment sector is one of the most dynamic in the real estate industry. ULI
Europe’s Retail and Entertainment Council examines all aspects of ownership and operation in this
sector, from shopping centres, high street shops, and out-of-town retail parks to restaurants,
cinemas, and concert venues. Through a programme of events and original content, the council
draws ideas from both established best practices and emerging trends to provide members with
insights into the retail and entertainment market.
1
Lack
Lack of
of R
Retail
etail Su
Supply
pply Since
Since 2008
2008
. 35%
33%
3 3% G
GDP
DP Growth
Growth Since
Since 2013
2013
18%
Unemployment
U nemployment Down
Down to 5.1%
5.1%
2. 3m
2.3m
E
Employment
2.5 4.9
16%
mployment ((Seasonally
2. 2m
2.2m
2016 2017
20
017
4.7 14% 2. 1m
2.1m
2.0
25% 12%
Unemployment
Unemployment
Population
Po
2. 0m
2.0m
pulation (million)
4.5
Rates
ates
Seasonally A
10%
1.5
1. 9m
1.9m
(mil ion)
owth R
4.3
8%
Growth
15%
1. 8m
1.8m
4.1 6%
P Gr
1.0
Adjusted)
4% 1. 7m
1.7m
djusted)
GDP
3.9
GD
0.5 5% 2% 1. 6m
1.6m
3.7
0% 1. 5m
1.5m
0.0 3.5 2013
013 2014 2015 2016 2017E 2018F 2019F 2005 2006 2007 2008 2009
9 2010 2011 2012 2013 2014 2015 2016 2017 2018
Q1
1996
1997
1998
1999
2000
2001
2002
2003
2004
2006
2007
2008
2009
2010
2011
1
2012
2013
2014
2016
2017
2005
2015
-5%
-5% Empployment
Employment U nemployment R
Unemployment ate
Rate
201
Shopping
Sh o p p i ng C
Centres
entres Retail
R etail Pa
Parks
rks Population
Po pulation (R
(RHS)
HS)
le Income Has Never Been
Disposable n Higher ousehold Net
Household
H Net Wealth
Wealth Back
Back to 2007
2007 Level
Level
1,000
120 8%
100 6% 750
Disposable
Disposable IIncome
4%
Current
rrent
80 500
! billion
illion – Cu
2%
60 250
ncome Gr
billion
0%
40
!b
(2)%
(2)% 0
Growth
owth
20 (4)%
(4)%
(250)
(2 50 )
(3))
(3
2002
2003
2004
2006
2007
2008
2009
2010
2011
1
2012
2013
2014
2016
2017
2005
2015
201
0 (6)%
(6)%
2007 2008 2009 2010
0 2011 2012 2013 2014 2015 20
2016
016 2017 2018
Q1 Financial
Financial Asse ts
Assets Liabilities
L iabilities Housing
H ousing Asse ts
Assets Net
N et Worth
Worth
Ireland
Ir eland Di
Disposable
sposable In
Income
ncome ((LHS)
LHS) Euro
E uro A
Area
rea ((RHS)
RHS) Ireland
Ir eland ((RHS)
RHS)
Local Market Demand
• As a result of the healthy economic • The target focus changed to food place
Overview environment and outlook very low and are frequent shoppers that shopped
vacancy. Massive deleveraging three or four times a week instead weekly
period - €64bn has been deleveraged shops.
Neil Bannon,
since the high point (in Irish economy
Director, Sigma Retail partners
in general) This gives an opportunity to General Retail Commentary
Neil talked about demand, supply and
retail as the population has less debt to • Retail Rents are now back where they
general commentary on the Irish retail
pay off. were in 2002 but in 2002, there were
market.
1 million less people and more debt.
• “Ireland has become a nation of savers”.
Key takeaways: Since the crash we have been • The future of Irish retail is in existing
Supply deleveraging and are now aggressively stock and is adapting to today’s market.
• Very strict guidelines for the provision of saving, counterintuitively as interest
retail centres planning (favouring town rates are zero. • Less likely to build neon shopping
centres) has constrained ability to centres, but there will be extensions,
develop retail in Ireland. • Decathalon, IKEA and Victoria’s Secret renovations as well as neighbourhood
are new entrants to the market and schemes.
• 91 large retail units or centers have been provide a good gauge of the retailers
sold off since 2015 – accounting for half view of Irish retail market. In particular • The value of public spaces are key in
the market. Most to Private equity funds F&B brands, as well as independents are complimenting shopping centres as
with a short term life span, 5 year attracted to the market. opposed to putting in shops for the
strategies, so most will reappear on the sake of it.
market in Q1 2019 – Q2 2020. • Lots of existing retailers are expanding.
• A lot of people are seeing the death of
• Goodbody Retail park per capita study • Often new entrants can get it wrong and retail in the UK are expecting it in the
shows that Ireland has a higher than the be naïve when entering new markets but Irish market and scratching their heads
EU average supply. Retail differs by existing retailers are expanding gives the as to why it has not happened here yet,
region and many Irish people have to retail market a healthy outlook. it’s a completely different market
travel 40 – 60 minutes to get to a economically, socially and
retail park. New Development Project Swan Yard demographically.
• The Swan Yard project is located in
Docklands, a wealthy part of the city
center. It targeted students and the
elderly.
2
“The Irish retail market is like speed dating – in the 1980’s we had nothing – In the 90’s
& early 2000’s we went crazy – Late 2000’s we got a hangover – Now we are cautious”
“To sum up – supply fixed, demand good, rents not overvalued”
essentially allows local councils to
Borough Yards, • Physical Improvements – Obtained
Planning Permission to reconfigure rail deliver housing through fast track
London/ arches and create mixed use planning.
Promenaden, Oslo – development – Complete development
will have leisure, retail and office to • Central Plaza in Dublin City Centre has a
Redevelopment ensure an exciting tenant mixed and building which was historically insulated
Projects stable cash flow. from the public, as you'd expect with
Central Banks. Hines plan to open it up
• Leasing - Optimised the leasing and connect the city.
Herman Kok, Vice President, Head of schedule to get tenants that fit the
Research, Meyer Bergman authentic surrounding. • The growth of Dublin's prime retail high
Herman highlighted that retail has street, Grafton Street, was seen as an
always been under disruption and • Brexit does not have an effect on opportunity for this development.
noticed three main trends; importance Borough Yards. Meyer timed it well and
of mixed use; food and beverage rising construction costs are not having • A lot to benefit from upcoming council
becoming popular; and flexibility. an effect. decision on pedestrianisation of college
plaza.
• Authentic and niche retail are less
Key takeaways:
vulnerable to political and economic
• Borough Yard is a forgotten part to a
instabilities. “Having the Retail Product
booming part of London. It is close to
London Bridge rail station and near local
Council in the Tallaght
attractions such as the riverside and Square is ironic. It was
Tate Modern. Mixed-Use Projects the first ‘out of town
development’ in Ireland
• The historic arches were imperative for
Frank Martin, Director Asset and is now used as a
the success of the entire scheme, they
Management, Hines template for how it
helped to add ‘authenticity’. Authenticity
adds value. People like the uniqueness shouldn’t be done.”
instead of going to general,
Key takeaways:
homogenous shopping malls.
• Liffey Valley, a large shopping centre Council discussion:
was Hines’ first project here. • To make Cherrywood a place and not
• There has been a significant increase in
housing and office stock in the direct another town development, the key is
• Cherrywood demonstrates how Ireland mixed use. There will be a combination
catchment area.
has learned from Tallaght. It is a of student housing, apartments and
development site with a tram system, housing. 30% of the development will
• Borough Market alone generates footfall
well developed surrounding housing, be leisure and F&B. Accessibility to the
of some 20 million visitors per year
wealthiest catchment in Ireland and site will be key for success.
while London Bridge rail and under-
close to the M50 ring road.
ground stations generate footfall of 130
million per year. • To give Cherrywood a sense of character
• Cherrywood is in a Strategic is down to the people who live there
Development Zone (to deliver so the residential offer must be right.
sustainable structured developments). Cherrywood could learn lessons from
In the current economic climate this Porta Nuova in Milan, on what went
wrong and not to replicate their
mistakes.
3New Innovative
International
Leisure Project
Justin Beavis, Founder, Chief
Development and Commercial Officer,
Urban Legacies Limited
Key takeaways:
• There has been a constant theme of
disruption when talking about retail
property and ‘leisure’ has become a
buzzword. The market for entertainment
is set to grow. "Experience" “People shouldn’t be Hammerson
entertainment is probably one of the choosing, or forced to Site Tour
biggest trends today.
choose, the same activity
• Seniors are asset rich and wish to week in week out, it’s time The council members went on a site
experience things whilst millennials are tour of Dundrum shopping center
to find something new”
often quoted as the reasons for
disruption in entertainment.
Key takeaways:
Urban Adventure key takeaways:
• Examples of disruption in leisure • Dundrum’s main competitor is the city
• 12-20 sport activities together in one
include; Puttshack, TopGolf, Bounce centre. For Dundrum, being on the Luas
place.
and The VOID. (local transport system) is vital.
• Leisure reimagined is not just about one
• Messenger Coffee Company in Kansas • High occupancy can actually be a
activity but about creating a social space.
city is a best practice example of how the challenge. When shopping centres
café reimagined itself. Its changing menu change and have churn with retailers, it
• There will be different F&B to cater to
connects customers to the farm and keeps the centre ‘exciting and refreshing’.
different customers. For example, food
builds relationships with farmers. Dundrum was developed during the Celtic
that’s high in protein for fitness
tiger and tried to tie down tenants to as
• There is a huge opportunity for private customers, pizza and beer for casual
long a lease as possible when the crash
equity and pension funds to bring customers.
happened.
foreign ideas into domestic markets for
example, something simple like the • Private Equity is following adventure
• Key drivers for growth;
Tramshed in Sydney. and leisure centres keenly.
- The ‘right’ space for tenants. It needs to
be the right one for them and also the
A storm of global
right area and feel for their brand.
“The future of the trends are coming - Aligning F&B with the ‘profile’ of the
shopping mall is not just together at the same
Shopping centre to more high end offer,
time to cause malls
about shopping” to change the role such as Fallon & Byrne foodhall are
forbes.com
they play in people’s
opening a 10,000 square feet flagship
lives.
store soon.
A focus on leisure and entertainment, No longer are they
- Bring in more new brands
instead of one primarily on shopping, is one primarily about
critical aspect of a trafficked, financially shopping.
viable mall today.” • Strategy for Dundrum going forward;
Global Real Estate Experts Now, when
consumers visit - To create desirability
malls, they are - To make Dundrum an iconic destination.
"A visit to the mall means meeting in a vibrant, looking for
multifunctional complex which can include experiences that go - Retail specialism – pop-up stores
multiplex cinemas, dramatic theatre well beyond - Re-develop the old town centre.
performances, fine dining, and any games you traditional shopping”
can enjoy with friends and family” - Add residential in the mix.
McKinsey & Company
REP Europe Real Estate
4Members and guests of the Council
Neil Bannon, Sigma Retail Partners Peter Reilly, JP Morgan
Justin Beavis, Urban Legacies Andy Watson, Europa Capital
Marije Braam-Mesken, CBRE Global Investors Jon Zehner, La Salle
Kenneth Christian, CallisonRTKL
Simon Hersom, Value Retail PLC and SD Malkin Properties
Chris Igwe, Chris Igwe International
Herman Kok, Meyer Bergman
Wilson Lee, Cale Street Partners
Frank Martin, Hines
James Raynor, Grosvenor
Marc Reijnen, M&G
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