A new shopping development is set to revolutionise the retail map of the Irish Midlands – a former backwater that’s now experiencing an economic boom. David Thame reports
For most metropolitan Dubliners, the Irish Midlands are no more than a large, flattish space between the capital and Galway. The area usually only comes up in conversation when talking about distant relatives – great-grandparents in Tullamore, or second cousins in Mullingar.
Yet after a century or more of tranquillity, the Irish Midlands are set for revival. A soon-to-be-completed Dublin to Galway motorway and 20 years of steady economic growth have transformed the counties of Longford, Roscommon, Westmeath, Offaly and Laois from sleepy backwaters into sleeping giants.
Nothing marks the change more clearly than the €340 million (230.4 million) mid-August pre-sale of the new 300,000 sq ft (27,870 sq m) Athlone Towncentre retail scheme. The six-acre (2.4 ha) development will be the largest regional shopping centre to open in Ireland this year, and will house 70 stores arranged along two main covered streets, along with restaurants, residential space and a hotel.
Developer Gallico, the Westmeath business headed by local hotelier John O’Sullivan, believes Athlone Towncentre will dominate the Midlands and its 400,000 population – a catchment that will rapidly expand to 670,000 once the M6/N6 motorway is completed in 2010. It also insists that the scheme links in well with the rest of the retail in the town centre.
Athlone Towncentre sits alongside the existing main shopping street, Mardyke Street, the 130,000 sq ft (12,000 sq m) Golden Island shopping centre and the smaller Texas shopping centre. Taking into account the Towncentre scheme, Athlone will now offer more than 1 million sq ft (92,900 sq m) of retail floor space within a 300m walk. The scheme also has both a Tesco and Dunnes Stores on its doorstep.
“The idea is to create a fashion destination for the Midlands,” says Marcus Wren, director at the scheme’s letting agents Bannon Commercial. “Athlone is about 75 miles from Dublin and 55 miles from Galway,and very few of the international fashion names make it to Longford, Mullingar, Tullamore, or even in some cases Galway. But the new motorway puts Athlone at the centre of a growing market with a potential spend of €1.3 billion [881.1 million] a year. We wanted to capture that, as did the international fashion fascias.”
Wren says Athlone Towncentre will have a wide appeal. “Retailers such as H&M and Zara, which have both taken 11,000 sq ft stores in the scheme, aren’t even represented in Galway, and we will now attract shoppers from there. Having a 25,000 sq ft Marks & Spencer store makes a strong anchor, too.”
The scheme is 91 per cent pre-let, with few remaining gaps and French fashion retailer Promod has picked it as the location for its first store in Ireland. The retailer, which sells catwalk designs at mass-market prices, has taken a 2,500 sq ft (230 sq m) store that will sit alongside Next and Tommy Hilfiger. Athlone Towncentre’s agents are also talking to an upmarket footwear operator, an outdoor fashion store and homewares retailer Habitat. Zone A rents are about €2,000 (1,360) per sq m, close to rents at The Square shopping centre in Tallaght just outside Dublin, but well behind Liffey Valley, also in Dublin’s suburbs, which charges €3,900 (2,651) per sq m.
Wren expects that Galway and Liffey Valley will be affected most by the opening of the new scheme, rather than local centres such as Tullamore and Mullingar. “Customers will have a choice of using Athlone Towncentre or driving to Dublin and getting caught in heavy traffic, which they will probably still do in any event, but less frequently because everything is on their doorstep,” he says. “Or they could head west into equally heavy traffic in Galway. The opening of Athlone Towncentre will change the shape of the Irish retail scene, creating an autonomous local market in the Midlands.”
CBRE director of research Marie Hunt also agrees that the likes of Liffey Valley will be hit the hardest. “Liffey Valley is the first big retail offer you hit as you drive east from the Midlands and the appeal of something big on your doorstep in Athlone will be serious competition,” she says. “The appeal of Marks & Spencer will be strong – the retailer has enjoyed a fantastic response to its new store at Letterkenny and Athlone Towncentre is likely to see something similar.”
Others believe Galway will suffer the most. Edel Ramberg, retail fashion specialist at Savills Hamilton Osborne King, says the mix for Athlone is very similar to that of the Whitewater Shopping Centre in Newbridge, while Liffey Valley, with its restaurants and cinema, is much more of a family destination.
“Athlone is a young town with a high student footfall and, with stores like Zara, River Island, H&M, Vero Moda and Jack & Jones in the scheme, it offers a really good selection for that younger market,” she says. “If it takes from any market it would be Galway because it is only an hour-and-a-half drive and Athlone will have a good selection of brands that are not in Galway yet.”
Rival developers seem to think there is enough retail spend in the booming Midlands to keep everyone happy. And if planned retail developments for Longford (215,000 sq ft/20,000 sq m), Mullingar (270,000 sq ft/25,000 sq m) and Laois (300,000 sq ft/27,870 sq m) are anything to go by, there is confidence in the catchment.
Whether it pulls shoppers from the east or the west, investors have been quick to understand Athlone Towncentre’s appeal. A complex off-market deal in mid-August saw Gallico forward-sell the scheme for €340 million to Dublin-based consortium Corporate Finance Ireland.
Jones Lang LaSalle head of capital markets John Moran says the buyers’ estimate of 4 per cent annual rental growth is conservative. “Historically, the Irish retail scene has managed much better than 4 per cent,” he says. “With long leases in an Irish Midlands that’s underprovided with retail space and the scheme already showing evidence of rental growth, we’re convinced this will be the main Midlands retail centre.”
Athlone Towncentre is definitely one to watch and, while attention in the Republic of Ireland has usually centred on Dublin and its surrounding areas, it is encouraging to see that other regions are beginning to hold their own on the retail front.
Since we last visited…
A 389,000 sq ft (36,100 sq m) development at The Glasshouse in Tallaght will add to the retail provision in southwest Dublin. Developer Alburn has delivered a 40,000 sq ft (3,716 sq m) Marks & Spencer to anchor the scheme. Next door, planning permission has also been granted for a 650,000 sq ft (60,000 sq m) redevelopment at The Square in Tallaght.
In Galway, construction of the 266,000 sq ft (24,700 sq m) Briarhill shopping centre is due for completion this year.
The edge-of-town site sits on the main Dublin-Galway road. The city’s Ceannt station could also see a 603,000 sq ft (56,000 sq m) shopping centre coming on stream, making it the second biggest enclosed shopping centre in Ireland after Dundrum.
The 400,000 sq ft (37,160 sq m) Opera Centre retail scheme in Limerick has been granted planning permission. Belfast-based Regeneration Developments will start on the €250 million (169.4 million) scheme next year. In addition, three large retail schemes are already in progress in Limerick, including 250,000 sq ft (23,225 sq m) at the Parkway shopping centre, a similar amount of space at Coonagh Cross and 210,000 sq ft (19,329 sq m) at McDonagh Station.
In the southeast of Ireland, Arklow’s 250,000 sq ft (23,225 sq m) Bridgewater shopping centre opens this October.
The €130 million (88.1 million) centre, developed by North Quay, will include retailers such as Next, New Look, TK Maxx, Dunnes Stores and River Island.
A 187,000 sq ft (17,350 sq m) is under construction at Colpe Cross in Drogheda. About 60 residential apartments will be integrated into a village-style scheme that includes shops, caf鳬 restaurants and a supermarket. A fitness centre and medical centre will sit alongside the retail.
Work began earlier this year on the €45 million (30.5 million) Naas town centre shopping complex at Corban’s Lane, off the main shopping street. There will be a 43-unit shopping centre with more than 248,000 sq ft (23,000 sq m) of retail space and parking for 750 cars. Developer Marshalsea Property Company has set the completion date at 2009 for its scheme.