Jobs growth is driving the recovery in Ireland’s retail sector, which is expected to have its best Christmas trading period since 2007 according to a new report from Savills Ireland.

Dr John McCartney, Economist and Director of Research at Savills Ireland commented:

“Last week’s live register data confirm that unemployment has now been falling for 36 consecutive months.  This is great news for Ireland’s shopkeepers because, statistically, there is an almost perfect 1:1 relationship between employment and retail sales. On this basis alone retailers can expect their best Christmas trading period since 2007.”

Savills notes that footfall figures on Dublin’s key retailing thoroughfares are showing significant year on year increases and this suggests that total pedestrian movements on Grafton and Henry Street could hit the 1.1m per week mark in the run up to Christmas – a figure not seen since 2009.

Looking forward, McCartney expects the consumer economy to continue improving, leading to increased demand for retail space from both local and international retailers:

“Ireland has generated 28,000 new jobs this year and the figure is expected to rise to over 40,000 in 2015. With the back of our fiscal adjustment programme now broken, confidence is improving and household disposable incomes are gradually beginning to come back. Taking these factors into account, we expect to see a further recovery in sales which will feed through to increased demand for shop space and ultimately to rental growth.”

Commenting on the retail property market, Savills says demand for prime retail space in Q3 of 2014 continued to strengthen, resulting in the full occupancy of the country’s main shopping thoroughfare and rental increases in the best locations.

Larry Brennan, Head of Commercial at Savills Ireland commented:

“Demand for space in the Dublin city centre remains high and there have been a number of new flagship store openings in recent months – such as Nespresso on Duke Street, H&M on College Green and Lifestyle Sports and Claire’s Accessories on Grafton St. Demand for space on Grafton St and Henry St from local and international retailers remains high, leading to potential for infill developments in areas off these prime streets."

Outside of Dublin, Savills reports that demand for retail space in Cork continues to rise. Patrick St – the main retail destination in Ireland’s second largest city – is now close to full occupancy. Furthermore, a planning application has been lodged for the redevelopment of Merchants Quay shopping centre to facilitate additional tenants.

Elsewhere, in the prime shopping centre market, Savills report continued demand for shop space for a variety of retailers. One of Europe’s largest clothing brands - Jack & Jones – opened a new flagship store in Dundrum Town Centre last month. Spanish fashion brand Mango took space in Blanchardstown, while discount brand Tiger opened new stores in both Liffey Valley and The Pavilions in Swords.  In the Park, Carrickmines, furniture retailer DFS has recently taken 1,182 Sq m of ground floor space on a new 15 year lease.