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Ronald Quinlan Commercial Property Editor
July 27 2017 2:30 AM
The head of the UK-headquartered shopping centre giant, Hammerson, has dismissed the suggestion that the record rents now being paid for housing in Dublin might have a negative impact on the performance of its Irish portfolio even as shoppers find themselves with less and less disposable income.
Speaking to the Irish Independent following the release of Hammerson's half-year results yesterday, CEO David Atkins said he remained "confident" over the medium term that the prospects for Ireland "remain on track" with the projections Hammerson had made when it bought into the Dundrum Town Centre and other Irish retail assets in October 2015.
Mr Atkins downplayed the potential significance of the spiralling cost of accommodation on consumers' spending power.
"Clearly as the economy grows, you can get imbalances coming through particularly around real estate in the short term as demand can outstrip supply. That normally readjusts as developers start to build," he said.
Mr Atkins pointed to Ireland's overall rate of economic growth, "positive consumer sentiment and healthy retail sales" as well as recent announcements by legal and financial services firms of their intentions to expand their Irish operations as supportive of the retail sector generally.
"Whether that's simply down to the skilled labour force or the desire to expand or adjust because of Brexit; the net result is more people and that brings prosperity to all," he said.
Hammerson's director of retail in Ireland, Simon Betty, also downplayed the potential impact of rising residential rents on Hammerson's tenants at Dundrum Town Centre, the Ilac Centre and the Pavilions in Swords. "To give some context across our portfolio in Dublin, we have something in the order of 50 million visitors per annum.
"While some of those may well be subject to increased rents and increased deposit requirements; at a fundamental level the Irish economy is doing very well, Dublin is doing very well, consumption is growing.
"Clearly a by-product of that is that the supply side of the residential market hasn't been delivering as quickly as demand has come through," he said.