After a year of mixed fortunes, retail growth is forecast

Restructuring by major UK multiples is having an impact on the North's retail sector but growth is still expected in prime locations, according to a report produced by the Belfast office of Hamilton Osborne King.

According to the report, the last 12month period has delivered mixed fortunes in the retail property sector, with growth focused on a number of key areas.

This is in line with the rest of the UK market, although it does not reflect the continuing strong performance in the Republic's retail sector which is still enjoying the effects of economic growth.

Mr Colin Mathewson, director of Hamilton Osborne King's Belfast office, said the North's retail sector was experiencing the effects of restructuring being carried out by some of the major UK multiples.

He said: "The performance in the retail property sector reflects a substantial realignment within retailing as a whole, with continuing pressure on the middle market fashion sector still a key issue and causing problems for such retailers as Marks & Spencer, BhS and Arcadia."

Mr Mathewson added that delays in the planning process in Northern Ireland continue to frustrate development, thereby restricting expansion of the retail sector.

During the course of the year the Belfast Regeneration Office announced that the MDC proposal for Victoria Square had been selected as the preferred development.

He commented: "This decision does not seem to have dampened the enthusiasm of the three remaining development sites, with all of these still progressing their respective proposals and openly stating that they intend to proceed.

"Naturally, this prolongs the level of uncertainty in the city centre market, with retailers and developers alike uncertain as to the likely shift of emphasis within the retail core, and is impacting on further investment and development proposals."

The volume of available retail units in the city centre reached unprecedented levels, with a number of units remaining available in Donegall Place and significant numbers available in Castle Lane, Ann Street and Wellington Place.

Mr Mathewson said: "The market is clearly encountering mixed fortunes and unless a retail unit is situated in a prime position and is of a standard configuration it is unlikely to let easily or secure a positive premium."

Positive examples within Belfast city centre include the current redevelopment of the former C&A site at 4046 Donegall Place by Redevco UK. This will provide two large retail units, both of which are currently on offer at record rental levels. It is expected the new tenants will be W H Smith, which is new to Ireland, and Next.

Castlecourt Shopping Centre re mains a sought-after location, with positive premiums still being achieved for leasehold interests. New tenants secured during 2000 include The Carphone Warehouse, Captain Cooks, Vero Moda and an extended Benetton store.

Mr Mathewson predicted that Zone A levels in Donegall Place during 2001 will increase from their current level of £200 Zone A to in excess of £225 Zone A.

IN THE provincial towns, 2000 saw the completion of a major extension at Fairhill Shopping Centre, Ballymena, with seven new retail units opening before Christmas, with such retailers as River Island, HMV, Oasis, Morgan, Vero Moda, The Jean Scene and Outdoor Ventures.

Fairhill Shopping Centre has now established itself in Ballymena as the dominant fashion shopping scheme and continues to go from strength to strength.

Mr Mathewson pointed out that the North awaits its first purpose-built factory outlet development. "These are now well-established in the UK and throughout mainland Europe. "It is widely considered that Northern Ireland will be able to sustain one of these schemes in an appropriate location and a number of proposals are currently under consideration."

He predicted that retailing in Northern Ireland will continue to experience significant realignment during 2001. This will be targeted primarily at the high street and at shopping centres. Prime units of a sought-after configuration will continue to secure increases in rental level or positive premiums, with secondary locations and less desirable configurations suffering.