Property investors have taken full advantage of the urge to splurge, and none more so than Joe O’Reilly, the reclusive Longford-born developer of the €1 billion Dundrum Town Centre. He emerged last week as the likely purchaser of a half share in the Ilac Centre, in Dublin’s city centre, for €125m.

If, as anticipated, O’Reilly links the Ilac with the proposed Millennium Mall on the former Carlton cinema site in O’Connell Street, it will add another shopping mecca to a part of Dublin that was considered a retail wasteland until recently.

Investing in residential property has grabbed the headlines lately, but operators such as O’Reilly and a small group of fellow developers know the real money is to be made in catering for the country’s new generation of shopaholics.

Although Dundrum will be the country’s biggest shopping centre when fully developed, it constitutes only 5% of the 20m sq ft of retail space that is under construction, about to be built, awaiting planning permission or has been proposed.

Neil Bannon, the chief executive of Bannon Commercial, and one of the agents responsible for recruiting tenants for Dundrum, says that Ireland is “undershopped”, even though new centres are planned for Dublin, Athlone, Cork, Roscommon, Sligo, Newbridge and any town with a catchment area of at least 10,000 people.

“Retail supply tends to be lumpy and, prior to the current wave, very little has happened since the mid-1990s, when Blanchardstown, the Jervis Centre and Liffey Valley were built,” he said. “People talked about oversupply when these centres were built, but just look what has happened to the economy since. There is still a fantastic demand from people to spend money.”

While retail sales are in the doldrums in Britain and America, consumer spending in Ireland shows no sign of stalling. This has not gone unnoticed among British and European retail chains, which have not been put off by a market with a total population the equivalent of greater Manchester.

Two weeks ago H&M, the Swedish fashion giant, declared sales of €4.5m for the first three months trading in its first Irish store at Dundrum. The company has already announced plans to set up three additional stores here this year, two in Dublin and one in Limerick.

The willingness of transnational chains to locate beyond Dublin is indicative of the strength of the Irish market. Analysts point out that a few years ago there was little interest from companies such as Marks & Spencer in setting up in towns such as Athlone.

Agents are now turning their attention to American icons such as Old Navy, Crate & Barrel, Brooks Brothers, Gap and Eddie Bauer to complement such top European names as Zara, which was so keen to come to Ireland it took space in a department store rather than open a standalone outlet.

The newcomers appear to have enjoyed the experience so far, with several already confirming expansion plans. For many of them, the optimistic forecasts for their Irish operations contrasts starkly with their home markets.

“The outlook for retailers in Ireland has seldom been brighter,” said Alan McQuaid, chief economist at Bloxham Stockbrokers. “At some point there will be saturation, but it certainly will be closer to the end of the decade than now.”

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