A shift in the structure of employment from part-time to full-time is boosting Ireland’s economic recovery and having a positive knock-on effect on the retail sector, according to a new report from property consultants, Savills Ireland.

Dr John McCartney, Economist and Director of Research at Savills Ireland said;

“Overall, 76,600 new jobs have been added in net terms since the low point in Q1 2012, but the structure of employment growth has also been changing. We are now seeing part-time jobs being converted to full-time employment as the recovery becomes more deeply established.  As a result, consumer confidence and disposable incomes are improving. This is feeding directly through to the tills with retail sales up 8.6% in July, the ninth consecutive month of growth”.

McCartney also noted that the rise in big-ticket purchases is evidence of a pronounced shift in the consumer psychology;

“Jobs growth has driven consumer confidence to its highest level since January 2007 and we see this reflected in increased sales of larger, more expensive items such as cars and furniture.  Car sales have risen by a third in the last year, while furniture sales are up 13.3% in the year to July and have risen in each of the last 12 months. 

Commenting on the retail property market, Savills say that the demand for retail space in Q2 focused on prime high streets and shopping centres both in Dublin and in the main regional cities – where there was an increase in store openings.

Larry Brennan, Chairman and Head of Commercial Division at Savills said;

“Improving sentiment and sales have seen demand for retail space rise significantly, with competitive bidding for prime properties becoming commonplace. This in turn has led to rental increases in prime locations. Currently, Zone A rental values are between €4,000 and €5,000 on Grafton Street and €3,500 and €4,000 on Henry Street”.

However, Brennan said that this pick-up in activity has not yet been reflected outside of the main urban centres;

“Despite stronger activity on the ground, relatively few new entrants have come to the Irish market. Moreover, of these new arrivals, the majority are focusing on prime Dublin locations. However, as jobs growth and the housing market recovery diffuse from the main urban centres there will be a gradual improvement in regional markets.”

Looking ahead, Savills expects prime high street and shopping centre space to remain in demand – resulting in rents increasing and incentive packages tightening in these areas. Meanwhile, following the recent disposal of the Acorn Portfolio, and launch of the Spectrum Portfolio and Capital Collection, Savills say that retail investment sales are likely to continue – with NAMA taking advantage of the shift in investment focus towards retail – buoyed by the improving retail economy.

The full report is available here: http://bit.ly/1wafzXE