Real Estate Alliance

Real Estate Alliance Review of the Retail Sector in 2005

National property group Real Estate Alliance has Real Estate Alliance, Ireland�s leading national group of local auctioneers and estate agents, today released their findings for 2005 for the retail sector. Real Estate Alliance members describe this sector of the property market as being particularly buoyant over the last 12 months, providing investors in the retail market with the best long term yields to be had from property due to the buoyancy of the rental market throughout the country.

According to Eddie Barrett, Chairman of Real Estate Alliance; �the retail letting market is extremely strong at present which is giving great heart to property investors throughout the country.�

Most notably in this sector of the market is the fact that yields around the country vary by up to 3% in terms of return. Investors in County Dublin are averaging around 3.8% annual return on their investments. Higher yields in the regions include country towns like Bantry at 8% per annum and Carlow at 3.8%. Tourism towns like Killarney, Tralee and Carrick on Shannon come in lower with yields of between 3% and 7.5%.

The average price per m 2 for retail space varies greatly around the country with some of the key regional development areas proving to be property �hot spots� in 2005. The highest price per m 2 sold (based on an average 100sqm retail unit), according to Real Estate Alliance members, is in Killarney town where prices average about �19,000

per m 2 . The greater Dublin area is recording prices of between �15,000 to �17,000 per m 2 .(Please see table below for a full breakdown of average prices per square metre around the country).

Encouraging commercial property investors in the market is that rents for retail outlets are considerably up on last year (about 8% overall). The highest returns can be seen in areas including Ennis where prices range from �800 to �850 per m 2 . Areas including Tralee and Drogheda at about �800 per m 2 while at the lower end of the scale Lucan is averaging �645 per m 2 and Killarney �500 per m 2 .(Please see table for a full breakdown of average rents around the country).

Some Real Estate Alliance members have found that in many instances, because of low interest rates tenant occupiers are willing to pay more than investors for in situ retail property with tenant occupiers paying up to 10% or 15% more in North County Dublin and up to 20% more in Carlow and Tralee

The size of retail units required in provincial towns also varies with larger units exceeding 100 m 2 most popular in Tralee, Bantry, surburban Dublin, Nenagh and Drogheda. Smaller units of about 30/40 m 2 are most popular in smaller country towns for specialist shops.

Fit out incentives being offered in the retail sector around the country also vary with retailers being offered up to three months fit out rent free in Drogheda. In Killarney, Lucan, Carrick on Shannon, Tralee and Carlow tenants are being given a fit out period of between one and two months.

An emerging trend in 2005 is that premises suitable for pharmacy usage, particularly in the greater Dublin area, are generating significantly higher rents than other retail sectors to guarantee prime locations. Premises suitable for bookmakers betting offices are traditionally paying higher rents, primarily in class two buildings (former banks, finance houses). Video retailers and boutique uses are not as buoyant as they once were, noted Real Estate Alliance. Overall, tenants are paying premium prices for prime town centres, including key money, and particularly in areas where there are car parking facilities.

Real Estate Alliance member firms draw on vast experience in offering clients a top class service in residential, commercial, valuations, sales, purchases, lettings, agricultural lands as well as land development for housing sites, acquisitions, planning, zoning and professional consultancy, including rent reviews, arbitrations, CPO�s, lease renewals and appraisals.

For further details please contact Kirsten Connolly, Elevate PR on (01) 662 6562 or email kirsten@elevate.ie or eimer@realestatealliance.ie on 086 8249040.

Note to editors:

Membership of Real Estate Alliance Ltd is only open to firms led by members of the IAVI or S.C.S.

NOTE TO EDITORS

Real Estate Alliance is a strategic marketing alliance comprising some of the country�s best-established auctioneers and estate agents. Our key focus is on locally-owned and established estate agents. With one quarter of the alliance�s firms in business for more than a century, and with an existing IAVI president & five IAVI past presidents among the group�s members, the alliance is characterised by the established strength of its membership. In addition, membership is only open to firms led by members of the Irish Auctioneers & Valuers Institute or the Society of Chartered Surveyors.

Clients of REA members benefit from:

Real Advice

- Because member firms are locally-rooted and independently owned, they have first-hand market knowledge that ensures clients make only the best-informed real estate decisions.

Real Commitment

- Member firms are well established, leading local businesses built on delivering the best results for their clients.

Real Service

- Our member firms have the detailed understanding of the local property issues facing clients to ensure that they provide a superior range of client services.

Real Professionalism

- As Ireland\'s highest-qualified property professionals, REA sales staff are members of the IAVI or the SCS, the representative bodies for Ireland\'s top property professionals.

Real Confidence

- IAVI members complete far more property transactions than any other professional group. Our member firms harness this transaction volume to seize opportunities and speed the transaction process for you.

Real Coverage

- With more than 400 professional staff in 40 offices located nationwide, our member firms can provide the best real estate advice locally and nationwide.