One in five shops on Patrick Street were vacant at the end of last year, with one in eight units unoccupied on neighbouring Oliver Plunkett Street.
According to Lisney’s recently published Outlook for 2023, vacancy rates on two of the city’s main thoroughfares, Patrick Street and Oliver Plunkett Street, were 21% and 12% respectively at the end of 2022.
The 21% Patrick Street vacancy rate remains the same as at the end of 2021, and slightly above the 18.3% vacancy rate recorded by the end of 2020, when the impacts of the pandemic on the retail sector first hit.
Ireland’s largest property services company has said that while property deals have and are occurring on Cork’s key retail pitches, rising inflation, resulting increases in interest rates, and weaker consumer sentiment began to take hold in early 2022, just as the sector was beginning to make its post-pandemic recovery.
The report notes that there is a growing acknowledgment and acceptance amongst retailers of changes in city centre footfall, particularly regarding office workers and hybrid working.
Tuesday, Wednesday and Thursday are now the busiest weekdays in city centres, and while there is a push from employers to increase the number of staff coming into the office, retailers report that footfall is ultimately down two days a week.
This impact on retailers is also “being exacerbated by the squeeze in discretionary spending as overall household costs continue to rise with inflation at 8.9% in November 2022”, the report adds, predicting that where retail business models no longer make sense after three difficult trading years, “stores will close and the general vacancy rate will rise”.
The 2023 outlook report also noted that office vacancy levels in Cork are currently at around 14%, with the prospect of this figure being pushed higher as office occupiers move to sublet “grey space” left unused as more employees are working remotely.
However, the report notes that the availability of grey space sub-lets may be a positive, as it can provide fully fitted office accommodation, and give more flexible deals for occupiers who are still unsure of their space requirements in the context of wider global economic conditions and hybrid working.
As tech giants make job cuts and decrease their dominance in the Irish office property market, Lisney say they expect to see smaller scale, indigenous companies “taking advantage of recent trends; hiring staff and taking additional office space”.