Hammerson, which owns half of the Dundrum Town Centre, is searching for an architect to design a residential-led scheme on its Phase II land at the south Dublin mall.
Previous plans had incorporated a hotel at the site, but the development now looks to be focused on a mix of residential, retail, and food and beverage units, analysts said.
The planning application for the development is due to be submitted in 2021.
Separately, the retail landlord is in the process of submitting a final planning application for more than 100 apartments adjacent to Dundrum, to enable a start on-site next year. “In terms of the move towards more residential properties at its Dundrum site, the [commercial property] demand is in build-to-rent; it makes more sense,” Colm Lauder, analyst at Goodbody Stockbrokers, said.
“They have made it very clear that residential, and food and beverage offerings are where they see that the growth is.”
UK property giant Hammerson acquired 50pc stakes in Dundrum and the Ilac Centre in Dublin city centre in 2015, after paying Nama €1.85bn for €2.6bn worth of loans connected to the developments.
Hammerson also bought a 50pc stake in the Pavilions Shopping Centre in Swords, north of the city.
Meanwhile, the group swung to a loss of £319.8m (€351m) in the six months to June 30. On an adjusted basis, profits were down 10.5pc to £107.4m. Net rental income dropped 12.3pc to £156.6m.
The headline loss was largely down to a £423.4m revaluation loss on its property portfolio in the first half, as continuing market uncertainty and a slowdown in leasing affected value, especially in the UK.
In Ireland, the business reduced the value of its assets by 3.2pc. “The value moves are greater than we had expected, which is welcome, as we saw the need to move aggressively to align with market conditions,” Mr Lauder added.
Overall, like-for-like net rental income in Ireland fell by 7.4pc during the first half of 2019. This reduction was mostly down to Dundrum, which accounts for two-thirds of the portfolio’s value here.
Dundrum’s lower rental income was primarily due to House of Fraser falling into administration late last year, which resulted in a “significant” year-on-year reduction in rent.
However, the Ilac and Pavilions sites both reported increased income. The group also said it had achieved 90pc of its target to sell off £500m worth of its overall assets.
Hammerson chief executive David Atkins said: “We will continue to pursue additional sales throughout 2019 and into 2020 to further strengthen our balance sheet.”