Martin McGowan remembers that when he started working as an estate agent in Ballybofey, Co Donegal, in 2002, people weren’t as cautious as they are now about opening new businesses. He describes the period 2002 to 2007 as “boom times” and recalls “stuff was opening up left, right and centre”.
The auctioneer and undertaker wasn’t particularly surprised when it emerged last week that Ballybofey heads the table of Irish towns with the highest commercial vacancy rate, having jumped from just under 30 per cent to 33.6 per cent in a 12-month period.
That’s according to the latest report from GeoDirectory, which was jointly set up by An Post and Ordnance Survey Ireland to establish and manage a full database of commercial and residential buildings.
The report found the commercial property vacancy rate across the State had reached its highest level since GeoDirectory started recording the data a decade ago. Of 80 towns sampled, Edgeworthstown, Co Longford, was next after Ballybofey, with a vacancy rate of 30.2 per cent, followed by Shannon, Co Clare, with a 29.8 per cent vacancy rate.
In Co Donegal, the long wait for a bypass and resulting traffic congestion has had a huge impact on Ballybofey and its twin town on the opposite bank of the River Finn, Stranorlar, says McGowan, but the cost of doing business is also making people wary about opening new ventures.
“You do not have that impulsive thing now,” he says, explaining that once upon a time when professionals such as teachers or gardaí retired, they might have considered opening up a business.
More recently, running costs such as interest rates, energy bills and wages have put an end to “the impulsive starter-upper” who had easier access to finance before the 2008 recession, he believes.
“People were braver then because money was easier to access. Everything is more measured, more thought out or cautious now,” says McGowan, who also runs an estate agency.
He says many of the empty shops in Ballybofey have been owned by the same families for generations and in some cases they may not feel under financial pressure to sell or let their properties.
“A significant number are owned by families who are financially strong enough that they are not particularly bothered if they rent it or not,” he says. “It’s the same in a lot of small towns.”
The long-awaited bypass, which locals believe will end the traffic bottleneck that commuters from Sligo to Letterkenny and Derry dread in Ballybofey-Stranorlar, is referenced by many in the town when asked about the number of shuttered commercial units.
“Bypasses tend to hurt smaller towns and villages. I think it would be a big plus here,” says McGowan. With Cabinet approval granted for the project this year, hopes are high work will start by 2027.
Another widespread response in Ballybofey to the latest GeoDirectory Commercial Vacancy Rates Report is to point to its landmark department store, McElhinneys, which attracts customers from around Ireland, especially people with weddings on their mind.
“You’d think from the headlines that this is a one-horse town but there are major retailers and employers like McElhinney’s, Mulrines [fruit juice] factory and St Joseph’s hospital,” says McGowan. “Ballybofey is still very much active but heavily waiting on this bypass.” Many of the empty units, he adds, are not in the town’s Main Street.
Ballybofey and Stranorlar Chamber of Commerce also believes the report does not reflect the situation on the ground, with secretary Louise Patten questioning how up to date the figures are. The report compared vacancy rates between quarter two 2023 and quarter two 2024.
“Seven new businesses have opened in the last few months,” says Patten.
Butcher John Gallagher, based in a busy row of shops adjacent to McElhinneys, has weathered many economic downturns. His family business celebrated its 40th birthday on Saturday. It has thrived, he says, by adapting to changing tastes and by putting emphasis on its farm-to-fork ethos – Gallaghers produce their own cattle which they slaughter in their abattoir.
Gallagher is acutely conscious of the opportunities created by being sited at a car park – he is less than impressed by plans to replace it with a multistorey facility – and by being so close to McElhinneys landmark business. Stressing that “people gather people”, during McElhinneys sales he ups his supply of ready-made meals, knowing many exhausted bargain hunters will drop in for a handy dinner before rushing home to a hungry family.
While upbeat about Ballybofey’s future, he says the number of vacant units is particularly obvious in winter, when there are no lights on in some premises and “you have dark corners throughout the town”. He believes refurbishment grants should be provided to help people adapt traditional shops to meet today’s needs as shoppers flock to sprawling retail units on the edges of towns where parking is not a problem.
“There are so many pillars and posts rather than open spaces in these old buildings,” says Gallagher. “Once you get to a certain age the kick goes out of you for having a business and reinvesting. You don’t want that torture.
“But there is a lot of history in these family businesses. These people developed the town. It wasn’t me or my generation”.
Local publican and Fine Gael county councillor Martin Harley thinks another option might be compulsory purchase orders where property owners let town centre buildings fall into disrepair. The vacant unit survey should focus minds and if town-centre buildings were subject to compulsory purchase orders it might result in more people living in the town centre, he believes.
“It is a good idea,” he. says. “If people see a street being done up it kick-starts a process.”
Harley says that in situations where a premises has been in a family for generations, a current owner might not want to be the one to put it on the market. “And it is not worth people’s while renting premises,” he says. “They are going to get nothing back because of tax.”
He too thinks the bypass will be transformative for a town, which has a population of 6,000, with another 6,000 in its catchment area. But he thinks there are other reasons for the vacancy rate. Having just hosted a Co Donegal vintner’s meeting where a lot of the discussion was about the need to lower the 13.5 per cent VAT rate, he says costs are prompting closures of pubs and restaurants.
When the former postman opened his pub Harley’s Cheers on Main Street 31 years ago there were three drapery shops across the road; all are long gone and one of the premises is now vacant.
“A lot of it is down to online shopping. To me that is a big cause of town centres dying. Everybody’s kids do their shopping online,” says Harley.
As a publican, he knows many in the service industry who have struggled to find staff since the pandemic.
“They do not want to work weekends and bank holidays. They got out of the habit and they realised there is a different life out there – and it is hard to blame them,” he says. “And there are 10 bank holidays now”.
Business is brisk at O’Hehir’s bakery, next door to Gallagher’s butcher shop, but manager Shelley O’Brien isn’t too surprised to hear that the town has topped the list of vacant commercial units.
“People tend to stay at home more because everything is more expensive with inflation. Everyone is hurting,” she says. “Business are shutting down flat out. Bars, especially, are getting it tight because people drink at home.”
O’Brien has no doubt motorists travelling between Sligo and Letterkenny or Derry who brace themselves for delays in Ballybofey-Stranorlar during traffic snarl-ups will be more inclined to stop once the bypass is in place.
“The bypass is going on for 30 years,” she says. “When you are stuck in traffic you are not going to stop if parking is a problem. It is a bottleneck town.”
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