Food And Beverage Still On The Menu For Dublin Retail Sector

Despite a surge in the number and variety of dining options in Dublin in recent years, the market continues to see strong demand for space from a range of food and beverage operators.

Dublin has largely managed to avoid the problems that have hit the U.K. casual dining space over the last year or so. In March, chartered accountancy UHY Hacker Young reported that total pre-tax profits at the U.K.’s top 100 restaurant groups had fallen by 64% over the previous year, from £345M to £125M. Meanwhile, several high-profile chains — Byron, Prezzo and Jamie’s Italian among them — have undertaken company voluntary arrangements this year.

Over-expansion and increased costs for restaurants were cited by UHY as key drivers behind the fall in profitability.

Savills Director Retail Darragh Cronin puts the U.K. experience down to saturation in the market. “A lot of these food groups were trying to get to a scale where they could IPO or sell off,” he said. “It wasn’t about making money. The aim was to open 50 stores rather than 20 profitable ones.”

Dublin was not overly exposed during this time, according to Cushman & Wakefield Head of Retail Karl Stewart. As a result, demand for F&B space remains strong, he said.

“I would say 80% of enquiries are food and beverage-related, from a mixture of established, startup, overseas and Irish operators.”

New signings

A shortage of suitable units in Dublin has had an impact on demand. Where good space becomes available in prime locations, interest is strong.

One of the most high-profile recent additions to the dining scene in Dublin is The Ivy on Dawson Street, which opened in July in a 9,500 SF unit developed as part of the One Molesworth Street office scheme.

According to CBRE Senior Director Bernadine Hogan, the agent on the scheme, a number of higher-end operators have been looking for opportunities in the core city centre on the back of The Ivy’s opening.

At the more casual dining end of the market, Milano continues to expand steadily in Ireland and recently signed up to take a 3,400 SF unit at the new €3.3M restaurant quarter in the Swords Pavilions Shopping Centre. When it opens later this year, it will be the 17th Milano in Ireland, and the company’s 11th in Dublin.

Also due to move into the new Pavilions space is American hamburger chain Five Guys, which has agreed to take a 3K SF unit. The first Dublin Five Guys opened in Dundrum Town Centre in October and an outlet on South Great George’s Street is up and running. The brand has also signed up for a unit in the Frascati Centre in Blackrock, which is being redeveloped.

Brett, Derry and Ross Desmond — sons of Dermot Desmond — have the Irish franchise for the chain and, according to the Irish Times, are trying to secure space in Liffey Valley and have plans to open 10 outlets in Ireland.

Irish operators are particularly strong at the moment in terms of both take-up and demand. One of the most active players in recent years has been Press Up Entertainment Group, which operates a number of one-off restaurants, as well as the Elephant and Castle, Wowburger and Captain America’s chains, and the Irish franchise for Wagamama.

The group is fitting out a 3,900 SF unit in Friends First’s recently reconfigured Royal Hibernian Way on Dawson Street, where it will open Isabelle’s over the next two months. It is also in discussions on a couple of units for the Elephant and Castle brand.

On the lookout

One U.K. chain very much in growth mode and looking at the Dublin market is healthy fast food operator Leon, which has 60 restaurants, including three in the Netherlands, two in Norway and one opening in Washington, D.C., on 10 September. 

In June, the company announced that Cibus Concepts — led by Stuart Fitzgerald and Brian McIntyre — will be operating the franchise in Ireland with plans to roll out 20 restaurants by 2023.

The first Leon is due to open in Dublin before the end of the year, but details of that location are still under wraps.

Other names looking at Dublin include Hawksmoor, D&D and Rhubarb.

Another international chain seeking the right opportunity is Asian wok concept restaurant PF Chang’s, which has over 200 locations in the U.S. and a further 95 in 25 other countries around the world. German pizza and pasta chain Vapiano is also on the lookout for space.

Yet to be let

A number of new opportunities have recently or are about to come to the market. For example, Bannon is looking for a tenant for a 2,400 unit in Royal Hibernian Way.

“We’ve had a number of offers,” Bannon Director Darren Peavoy said. “We could let it to some of the faster food operators all day, every day at some very good rents. But the owner is being strategic in terms of picking the right tenant for the location.”

Dundrum Town Centre is planning to redevelop retail units next to Pembroke Square, including the former Hamleys toy store, into seven food and beverage units.

“We have offers on the majority of them and hope to confirm occupiers by the end of October or November,” Hogan said.

CBRE is also marketing two food units — one of 5,500 SF and the other around 10K SF — in Kennedy Wilson’s Capital Dock development. Again, offers are on the table, according to Hogan.

“We are finishing on-site in Q4 and are hoping that everything will be open and trading by the beginning of Q2 next year,” she said.

BNP Paribas Real Estate is marketing seven new F&B units in Central Plaza on Dame Street where practical completion is due at the end of 2019.

Interest has been “phenomenal”, BNP PRE Director Retail Deparment Mervyn Ellis said. The annex element of the scheme — just over 6K SF across three floors — is in legals.

“And we’re very close to having three more deals done in the next couple of weeks,” Ellis said.

BNP PRE and Bannon are also set to start marketing a number of F&B units in Blanchardstown Shopping Centre. Ellis said target occupiers will be mid-market casual dining operators.

Despite the levels of demand in the market, Peavoy believes lessons have been learnt from the U.K. — both from the owner and the occupier points of view. 

“Everyone’s a little more cautious now. Brands are out there looking for new units, but I think the heat has gone out of the market a little bit. People are doing their due diligence to make sure their brand is sustainable in the location and that the rent is sustainable in terms of target turnover,” Peavoy said.

“From the owner perspective, there’s a more considered approach to letting food units now. The day of thinking F&B will sort out all your retail problems are gone.”