RETAIL spending in the early part of this year has been below expectations, according to agents Hamilton Osborne King. David Potter, writing in the agency's journal, Property Outlook, attributes the lower spending to the exceptionally busy period before Christmas and the additional retail outlets available in Jervis Street and Blanchardstown.

Trading patterns are now beginning to settle down, with both centres reporting steady levels of trade, he says.

HOK estimates the turnover in some shopping centres in Dublin city centre and the suburbs has been down by between 10 and 20 per cent because of the competition from Jervis Street and Blanchardstown.

Mr Potter says Zone A rents in Dublin's Grafton Street are beginning to approach £200 per square foot. This rent level was achieved in an isolated case in 1989 but the fact that the premises were vacated proved that this rent was unsustainable at the time.

"Although there will be considerable resistance from tenants to breaking the £200 barrier, the reality is that if a shop of 1,500 square feet is available without a premium, it would in all probability exceed the £200 mark."

The magazine says the new regulations governing the licensing of dispensing pharmacies is intended to enable them to concentrate on providing a better service to the public. "One wonders whether increasing competition would equally have served this purpose." A legal challenge has been made to the regulations and the outcome was awaited with interest.

Mr Potter says that under the new regulations, existing urban pharmacies are entitled to a catchment area of not less than 4,000 people. A new pharmacy must also be at least 250 yards from the nearest existing one. HOK says that a preliminary look at the population per pharmacy based on the 1991 census, indicates that there are few, if any, locations available with a new licences.

Pharmacy values prior to the regulations were already at an all-time high, even before Boots and Connors entered the market. Fully-rented properties in new developments commanded sizeable premiums and established leasehold pharmacies - particularly those with a turnover of £500,000 and over - have been able to command key money of up to 70 per cent of turnover, with freeholds making up to 100 per cent of turnover.

HOK says that given the already high level of demand and prices, it is difficult to see significant short-term growth in the value of pharmacies. However, marginal outlets should become more saleable in their own right or for the purposes of relocation.

Existing operators would be able to spend money on their existing premises without fear of encroachment by competitors. They would also be particularly conscious of any relocation opportunities for pharmacies which may have become too small to fully meet the needs of the public.

Mr Potter says there are areas which will require clarification including whether an application could be made in respect of properties to which the applicant has no title - this had occurred in some recent shopping centre developments - the basis on which relocating would be permitted and whether (as recently ruled in the UK), the shopping centre constitutes a neighbourhood in its own right, with its own floating population and, therefore, is entitled to a pharmacy licence.

"Certainly, a shopping centre will attract well in excess of 4,000 persons and it would appear reasonable that customers are entitled to expect a full range of services, including a dispensing pharmacy. Recent applications have been refused in respect of new developments and these are currently under appeal."