THERE HAS been a sharp pick-up in lettings in the Dublin industrial property market in Q1 2010.

A new report from Savills shows that take-up exceeded 78,000sq m (839,584sq ft) in Q1 compared to 17,800sq m (191,600sq ft) in the same period of 2009.

The number of deals also rose sharply to 42 compared to only nine in the first quarter of 2009. The amount of floor space leased in Q1 2010 is equivalent to 70 per cent of the total volume traded in 2009.

Head of research at Savills Joan Henry says that the recent take-up cannot yet be seen as a sign of significant increase in demand as three large deals accounted for 63 per cent of all the space involved while the remaining 37 per cent accounted for 39 separate transactions. Most of the lettings were in the north-east and south-east.

Gavin Butler of Savills says that all transactions this year have been lettings rather than sales as there were few, if any, cash buyers in the market.

Another new trend is the reduction in the length of leases being negotiated by tenants. Previously contracts were generally for five years but many are now for a year.

Vacancy levels in the Dublin industrial market are estimated at 1.2 million sq m (12.91 million sq ft) compared to 1.053 million sq m (11.33 million sq ft) at the end of 2009.

Butler says the increase in vacant stock occurred because companies are exercising break options in leases, others are not renewing leases and some are consolidating the number of outlets from which they operate in an attempt to reduce costs.

The report also suggests rents have begun to stabilise at €55 to €85 per sq m (€5.10 to €7.90 per sq ft), depending on size, location and quality. The value of industrial property is estimated to have fallen by between €1,075 and €1,230 per sq m (€99.90 and €114.30 per sq ft).