Warehouse rents in Dublin have fallen by 60-80% as landlords vie for tenants, presenting an opportunity for international retailers active in Ireland to ship larger deliveries and store stock in warehouses, cutting down on the number of annual deliveries according to international real estate advisor Savills.
With prime rents currently ranging from 4 - 6 per ft² per year (43 - 65 per m²) and tertiary rents as low as 1 per ft² per year (10.76 per m²), the firm notes that retailers could cut annual delivery costs and store stock in warehouses until it is needed, following the example of Lidl and Primark.
According to Savills data there is currently approximately 14.5 million ft² (1.35 million m²) of vacant warehouse space in Dublin. In 2012 the firm expects a total take up of 150,000 m² in Dublin for prime to tertiary warehouse space, similar to 2011 levels and anticipates that prime rents are unlikely to rise again until at least 2013 2014 as supply decreases. Secondary and tertiary rents will remain at the current level until approximately 2015.
Gavin Butler, Head of the industrial team at Savills Ireland, says: "With rents as low as 1 per ft² per year and unlikely to rise for several years international retailers with stores in Ireland could capitalize by making fewer, larger deliveries and storing their stock in Ireland until it is needed in stores. This could bring down annual delivery costs for firms and cut down their overall expenditure."