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Can Dundrum Town Centre hold on to its place as Ireland’s retail mecca?

With Brown Thomas’s expansion delayed, the mall looks to other areas for reinvigoration

It’s a busy weekday morning in Dundrum Town Centre, as shoppers throng once more to the retail mecca of south Dublin.

Much of the shopping habits of old have returned – see the gangs of teen girls clustering around make-up in Penneys and the groups of excited children clutching their Build-a-Bear. But does the buzz of commerce belie the challenges that lie behind the glitzy façade?

After all, life at the centre is still not the way it once was. Masks are worn by all, while queues wind their way outside the ground floor outlets of Zara and H&M, as would-be shoppers are slowly let in.

And depending on when you get there, you may find your shop of choice is closed; some are operating restricted opening hours due to a difficulty in securing staff, with Harvey Nichols for example, only open from 11-7pm and Gant from 9-6pm, despite the centre’s 9pm closing time.


Moreover, the centre is still suffering the gaping wound that was inflicted when anchor tenant House of Fraser shut up shop last year.

With retail across the world facing significant challenges, and Dublin’s city centre currently burdened with an exceptionally high vacancy rate, can Dundrum Town Centre escape the worst and continue to make good on its original claim of ushering in a new era in shopping centres?

Pandemic shopping

As with all retail in Ireland, the centre, which is jointly owned by German insurer Allianz and UK property developer Hammerson, has been hit by extended lockdowns due to the pandemic, which have had a knock-on effect on rents.

It’s not just Ireland; around the world, shopping centres are struggling, hit by a combination of falling demand for retail space, low rent collection rates and higher vacancy rates.

In Ireland however, the impact may have been greater due to the duration of restrictions, which also impacted on click-and-collect.

According to accounts from Hammerson for example, rental income at the centre fell by 11 per cent to £55.1 million (€64 million) in the 12 months to end-2020, while pre-tax losses rocketed to £228 million (€265 million) for 2020, up from £93.6 (€109 million) million a year prior.

Rent collection has been lower in Ireland than the UK, with the joint owner noting in January that it had only collected 31 per cent of its rent roll in Ireland for the first quarter of the year, compared with 41 per cent in the UK.

And this isn’t going to remedy itself overnight.

"It's going to take a while for tenants to recover to pay rents in full again," says Colm Lauder, a real estate analyst with Goodbody Stockbrokers, "It'll be the end of December/January before we see normal rent collections patterns".

Fill in the gaps

It’s not just collecting rent from tenants who will remain that is the issue; the centre also has to manage the increase in retail closures that has hit the sector.

When the centre first opened its doors, back in 2005, a reported 75,000 people visited the so-called consumer cathedral on its first day, to shop in a host of stores new to Ireland, like House of Fraser, H&M and Harvey Nichols.

Now however, the centre has been with hit with the departure of House of Fraser, as well as other brands like Oasis and Aldo.

More recently, US casual clothes company Gap said it was closing 19 stores across the UK and Ireland, although it is not yet clear whether or not this will affect its Dundrum outlet.

The impact of empty units has been mitigated by bunching them together, such as in the Pembroke District, where stores such as Gant have been re-located elsewhere in the main centre, leaving a row of empty units together.

But the biggest space is undoubtedly that left behind by the House of Fraser which had 12,999 sq m over four floors.

Penneys, which has had a “busy” reopening, had been due to take up two of these floors. However, these plans were put on hold as a result of the pandemic, and a spokeswoman says this continues to be the case.

For now then, it will be down to Brown Thomas Arnotts to bring back the luxe to Dundrum, with its imminent expansion to the ground and lower ground floor units of the former House of Fraser space. The Selfridges-owned department store is currently part of a potential £4 billion (€4.6 billion) takeover approach for its parent, but even if this goes ahead, it is unlikely to impact on any plans for Dundrum.

The expanded store was due to open this autumn, but a spokesman for the store says it is now eying an opening in spring 2022 due to the impact of Covid.

“We are going ahead and we see this as a very exciting opportunity,” he said.

But of course even if Penneys follows Brown Thomas across the shopping centre, it is merely a relocation; the move will leave the two sizeable units they formerly occupied needing to be filled.


Nonetheless, despite the challenges, Dundrum appears to be retaining its premium cachet better than other shopping areas; in Dublin’s city centre, both Henry Street and Grafton Street have been besieged with vacancies, but Dundrum seems to be better managing the ebb and flow of retailers.

Chris Andrew, is a director with Weir and Son, which opened an outlet of its jewellery shop back when the centre first launched.

Since re-opening, he says the store has been “comfortably busy” and is happy with the trading environment.

“It’s been a good place for us to be, there’s a good catchment area around Dundrum,” he says, adding that the shopping centre seems to have weathered the recent shifts in retailing better than elsewhere.

“It’s still, in our opinion, the best shopping centre in the country. We’re happy with the way it’s gone,” he adds.

Residential is also likely to be a larger feature of the wider development going forward

And the centre still attracts a premium. Fillit is a company which rents kiosk -type space at shopping centres and supermarkets across the country. In Bloomfield Shopping Centre in Dun Laoghaire for example, the average daily rate for a 2 sq m space is about €198 a day, or €650 a day in the Ilac Centre on Henry Street and €150 a day in the Douglas Court shopping centre in Cork.

In Dundrum Town Centre however a 3 sq m space costs from €2,200 a day.

“Tenants want to be there, it’s still the most important retail pitch in terms of a location in Ireland,” says Lauder, adding that an uptick in retailer interest is likely in the autumn, particularly if, as expected, rents continue to soften across the retail market.

“I would be of a view that market rents still have some way to fall,” he says, but adds that this means that “retailers will be looking at locations they previously couldn’t afford”.

This status of Dundrum means that stores might prioritise rent payments here, above elsewhere.

“If a tenant is going to prioritise anywhere, they might prioritise Dundrum,” says Lauder, adding, “When it comes to paying off arrears, prime retail pitches like Dundrum will outperform”.

Future is mixed

The changing retail environment, and the acceleration in the shift seen during the pandemic to online shopping, also means however, that Hammerson won’t be relying just on retail rents to preserve and grow the centre. Food, drink and leisure offerings will also become increasingly important.

Part of this re-focus had been a plan by Fallon & Byrne to establish a 10,000 sq m food hall and restaurant in a newly-renovated building on Pembroke Square, but it’s understood that this not now going ahead.

Instead, a spokeswoman for Hammerson says it is “currently looking at options for the space”, as part of the new dining and leisure quarter at the centre.

Leisure is also set to play a greater role going forward. A section of units formally occupied by retailers such as Hamleys and Cath Kidston is now going being repurposed for mixed use, including office and restaurants.

The offering will include an eight-lane bowling alley with dining from Paddy McKillen jnr and Matt Ryan’s Press Up Hospitality Group. Originally due to open in 2020, the project has been hit by Covid-related construction delays, with a spokesman for the group noting that other projects are taking priority right now, and little evidence of work being carried out on the site.

However, the project will progress, but under a new name; Press Up is currently workshopping a name change from Stella Bowl at present.

Residential is also likely to be a larger feature of the wider development going forward. Back in 2019, Hammerson received planning approval for 107 new apartments to be known as The Podium, on Sandyford Road, its first move into residential development in Ireland.

Part of its CityQuarters initiative, Hammerson said the Dundrum plans will set the “benchmark for future developments across the Irish portfolio at Dublin Central and Swords Pavilion”, and will consist of 50 one-bed and 56 two-bed apartments, and a studio flat. Construction work was due to begin last year but has been delayed due to Covid, with the spokeswoman noting that it is currently “reviewing the construction timetable”.

It is not year clear whether Hammerson will build and rent the development itself, or sell onto a private rented sector (PRS) specialist, but the initiative, which will create around 200 new shoppers almost living on site, as well as steady rental income should they retain ownership, has its advantages.