RETAIL SERVICES GLOBAL CITIES RETAIL GUIDE CUSHMAN & WAKEFIELD CUSHMAN & WAKEFIELD 2012/2013. ireland

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1 RETAIL SERVICES GLOBAL CITIES RETAIL GUIDE 2012/2013

Overview Ireland has transformed itself over the last three decades from a largely agricultural based economy into a modern, highly educated and technologically advanced economy; with a younger than

2 Overview Ireland has transformed itself over the last three decades from a largely agricultural based economy into a modern, highly educated and technologically advanced economy; with a younger than average population compared to other developed western countries. Despite the recent contraction in the economy, the country began to return to growth at the end of 2011 and this has continued into early In terms of retail activity, fashion retailers have remained largely dormant in opening new space recently, with the exception of Abercrombie & Fitch who have acquired space for their first store in Ireland, in Dublin city centre, due to open autumn However, the young professional consumer profile that Ireland offers attracts interest from domestic and international retailers continuing to expand or looking for opportunities to enter the market. This new demand is particularly strong from discount and convenience food retailing, coffee shops, pharmacies and restaurants.

Economic Overview Photo / LenDog64 on Flickr economic summary ECONOMIC INDICATORS* 2009 2010 2011 2012F 2013F GDP growth -7.0-0.4 0.7-0.3 0.9 Consumer spending -7.0-0.7-2.7-2.6-1.

3 Economic Overview Photo / LenDog64 on Flickr economic summary ECONOMIC INDICATORS* F 2013F GDP growth Consumer spending Manufacturing production Investment Unemployment rate (%) Inflation US$/ (average) US$/ (end period) Interest rates 3-month (%) Interest rates 10-year (%) Note: *annual % growth rate unless otherwise indicated. E estimate F forecast Source: Oxford Economics Ltd. and Consensus Economics Inc economic breakdown Population 4.5 million (2010) GDP US$217.9 billion (2011) Public sector balance -13.0% of GDP (2011) Parliament Head of State Prime Minister Election date Coalition: Fine Gael, Labour Party Michael D. Higgins Enda Kenny 2016 (Parliamentary) 2018 (Presidential) retail sales growth: % change on previous year france F 2013F Retail Volume -14.8% 1.3% -0.8% N/A N/A Retail Value -19.9% -1.8% -0.6% N/A N/A

4 Largest cities largest cities (2011) CITY POPULATION Dublin 506,000 Cork 119,230 Galway 75,529 Limerick 57,106 Waterford 46,732 Source: Census 2011, Central Statistics Office (CSO), Ireland Photo / LenDog64 on Flickr

Retail Scene MAJOR DOMESTIC FOOD RETAILERS Musgraves, Dunnes Stores MAJOR INTERNATIONAL FOOD RETAILERS Tesco, Aldi, Lidl MAJOR DOMESTIC NON-FOOD RETAILERS Dunnes Stores, Penneys INTERNATIONAL

5 Retail Scene MAJOR DOMESTIC FOOD RETAILERS Musgraves, Dunnes Stores MAJOR INTERNATIONAL FOOD RETAILERS Tesco, Aldi, Lidl MAJOR DOMESTIC NON-FOOD RETAILERS Dunnes Stores, Penneys INTERNATIONAL RETAILERS IN IRELAND TK Maxx, Inditex Group (Zara, Bershka, Pull & Bear Etc.), Arcadia Group (Topshop, Top Man, Evans, Dorothy Perkins, Burton, Miss Selfridge, Etc.), Bestseller Group (Jack & Jones, Vila, Name It, Vero Moda, Etc.), Next, Abercrombie & Fitch, Marks & Spencer, Debenhams, and Disney FOOD & BEVERAGE OPERATORS Starbucks, Costa Coffee, McDonalds, Burger King, KFC; Wagamama, Supermacs, Milanos, Nandos, Bewleys TYPICAL HOURS MONDAY-FRIDAY SATURDAY SUNDAY (Thursdays until 21.00) Photo / loop_oh on Flickr

Retail Scene The Irish retail market is relatively small when compared with other European countries. The Republic of Ireland has a population of almost 4.6 million.

6 Retail Scene The Irish retail market is relatively small when compared with other European countries. The Republic of Ireland has a population of almost 4.6 million. Ireland is a mature and competitive retail market and has witnessed significant changes in recent years with various international retailers deciding to gain a foothold in the market. Data as of April 2012 Total existing stock of shopping centre (over 5,000sq.m) space in Ireland totaled over 2 million sq.m GLA in January A significant amount of new shopping centre development has occurred in the past decade and many provincial towns are now over-supplied with space. In general, prime urban centers do not suffer from this and in certain city center locations, opportunities still exist in the medium-term. Modern schemes are department store-anchored with catering and leisure elements. The Irish retail warehousing market is suffering from large vacancy rates at present. As with shopping centres, large volumes of accommodation were built in the last decade and it is likely that some schemes will be converted into alternative uses in the future. Traditionally, such schemes comprised bulky goods retailers, however in more recent years; fashion uses have been permitted and become popular with international retailers. There is just under 1 million sq.m GLA retail warehousing space in Ireland (January 2012), this figure is unlikely to change in the medium-term. The factory outlet centre market in Ireland is not very mature, with only three outlets throughout the country. The largest of these, in the greater Dublin area, continues to perform very well. E-commerce continues to develop and has been enhanced in recent times with international retailers opening up their sites to Irish customers. It is possible to enter the Irish retail market direct, through many franchise opportunities and enter via concessions in larger department stores and shops. Photo / infomatique on Flickr new entrants to the market There are no restrictions on foreign companies either buying or renting property in Ireland. It is generally believed that the traditional Irish lease structure is more orientated toward landlord than tenant; however the nature of leases is changing. While upwards only rent review clauses still exist in legacy leases (pre-february 2010), such clauses are now legally prohibited in all new leases. The length of leases has become shorter -10 years. Break options will depend on the location and relative strength of the parties. Although it is possible to occupy a new building within a few weeks, it is more realistic to expect that on average it will take 6-9 months from initialising the property search to taking occupation of an existing property. This includes time for considering location options, the identification of buildings or sites, negotiating leasehold or freehold terms and drafting of the appropriate legal documentation. Hollister Abercrombie & Fitch Pandora Republic Disney Poundland 99p Stores

7 Key Features of Lease Structure KEY FEATURES OF LEASE STRUCTURE Lease Terms Rental Payment Rent Review Service Charges, Repairs and Insurance Property Taxes and other costs Disposal of a lease Valuation Methods Legislation Traditionally, Irish leases have been for a term of 20/25years and could be higher with 35 yrs. often seen in parts of the retail market (e.g. for an anchor tenant). Leases are now more typically for 10 years. Break options were rare in the past but now increasingly negotiable. In the absence of a clear agreement in the lease, the tenant has no legal right to break so long as the landlord fulfils his obligations. Where agreed, breaks are typically at the first rent review. The authorised use will depend on the terms of the lease which will also state the degree to which this may be varied by the tenant. Rents are typically payable quarterly in advance, though monthly payment can be negotiated. Turnover/percentage rents are increasingly seen in shopping centres and on prime high streets. A security deposit is not normally required for a tenant with a strong covenant or where a parent company guarantee is provided. For weaker covenants, a deposit may be required, by negotiation with 6 months rent equivalent commonplace. Rent reviews are generally to open market rent. For the majority of leases entered into prior to February 2010, rents cannot fall below passing levels, even if the market rate is lower. For leases that commenced after this date, or at lease expiry, rents are permitted to fall to the market rate. Indexation is not common practice but is being seen on an increasing basis, together with fixed uplifts. A service charge is usually payable in multi-tenanted buildings and covers management fees, security, cleaning, landscaping, internal maintenance of common parts, external maintenance and insurance, servicing of elevators, water, heating, air conditioning, management fees and property taxes. It excludes internal maintenance and insurance of rented accommodation, utility charges and VAT. The landlord is responsible for external and structural matters in shopping centres (charged back via service charge) or tenant (except in multi-let buildings). The tenant is responsible for internal matters. The landlord usually insures the main structure and external fabric but will charge this back to the tenant. Insurance for common parts is also paid by the landlord and charged back. The tenant usually pays for internal insurance directly. The local government authority charge commercial rates, the local property tax, which is payable on commercial property. A new rate is struck each year and this is applied to the rateable valuation of the property. Generally, rates will amount to approximately 20% of the rental but this varies. Sub-letting is usually possible under the terms of the lease, subject to landlord s approval. Assignment rights are not normally barred in the lease but will also be subject to consent which should not be unreasonably withheld. Early termination is only by break clause to be negotiated at outset of lease by mutual consent. At lease end, the tenant is responsible for re-instating the premises to the same condition as at the start of the lease, subject to normal wear and tear. All tenant improvements must be approved by the landlord, subject to the alteration covenant in the lease and the fact that approval should not be unreasonably withheld. Shops are valued on a zoning basis. The retail zoning principle recognises that the area at the front of the shop, adjacent to its primary window frontage (normally referred to as Zone A ) is the most valuable in rental terms. The rate per square foot halves back through regular depths (i.e. the first three zones of 20 ft / 6.1m each) towards the rear of the ground floor, with Zone B valued at A/2, Zone C at A/4 and Remainder at A/8. Upper and lower sales floors are valued on an overall basis rather than on the basis of zones. Landlord and Tenant Act, 1980 (as amended) and subsequent acts. Leases must be in writing and the lease document forms the standard documentation required. A mandatory standard form of lease does not exist although a market standard is in place.

8 JOHN STRACHAN Global - EMEA Ph: Portman Square London, England W1A 3BG john.strachan@eur.cushwake.com MATT WINN Americas Ph: Ivan Allen Jr. Boulevard, Suite 700 Atlanta, GA matt.winn@cushwake.com SANJAY VERMA Asia Pacific Ph: /F The Headquarter Building 168 Xizang Zhong Lu Shanghai, China PRCi sanjay.verma@ap.cushwake.com No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions imposed by our principals Cushman & Wakefield, Inc. All rights reserved.

RETAIL SERVICES GLOBAL CITIES RETAIL GUIDE CUSHMAN & WAKEFIELD CUSHMAN & WAKEFIELD 2012/2013. belgium

RETAIL SERVICES GLOBAL CITIES RETAIL GUIDE 2012/2013 Overview Photo / williamsdb on Flickr Belgium is a relatively small but very international market with a population of 11 million and above European