The successful launch of the second phase of retail warehousing at Blanchardstown Town Centre and the proposals for a 300,000 sq ft retail park just north of Dublin Airport are seen by agents as proof of the continued market demand for out-of-town shopping.
The success of Blanchardstown Town Centre has encouraged Cosgraves to proceed with a similar development of 140,000 sq ft in the same area; at Liffey Valley Shopping Centre, construction has started on the first phase of 310,000 sq ft of retail warehousing alongside the shopping centre. While much of the retail warehousing planned beside shopping centres can in principle be used as food outlets because of the town centre zoning, it is not yet known what view the planners will take of any such departures.
Also of importance will be the report of the expert group set up by the Minister for the Environment after he announced the 32,000 sq ft cap on food outlets last year. This effectively blocked the advance of the UK food multiples in the Irish market.
Agents agree that the most successful retail parks are those adjacent to major shopping centres, a trend that has already been proved in Britain and in the North, which has successful retail warehousing developments alongside the Marks & Spencers-anchored shopping centre at Sprucefield and on the northern shores of Belfast Lough where the Abbey shopping centre has acted as a pivot for successful retail warehousing in Newtownabbey.
The Republic's out-of-town developers and specialist agents are also watching developments in the UK, where planning restrictions are increasingly being placed on major developments. However, despite the trends in the UK, Dublin agents point out that retail warehousing in the Republic is starting from a near-zero base.
Only in the past two years has the retail warehousing sector begun to take off. Warehousing projects are likely to spring up along the route of the M50 around Dublin and also in many provincial towns.
Agents Jones Lang Wootton have been retained by David Daly Management to market its proposed 300,000 sq ft retail park development at its Crow's Castle site between Dublin Airport and Swords. The retail development would occupy some 25 acres of a 75-acre site for which planning is also sought for office, light industrial and leisure development.
The application, agreed by Fingal County Council, is currently awaiting appeal to An Bord Pleanala following an appeal from the Irish Hardware Association. The Crow's Castle development envisages 15 retail warehousing units and a decision is expected from An Bord Pleanala on the objection before the summer.
Stephen Murray, retail partner at JLW, commenting on the success of existing retailing warehousing developments, said: "I suspect the key is that the larger schemes which are proving successful are those which are part of town centre developments. There is a relationship between speciality retail and shared parking within the new town centres. There is a synergy here and these are the types of schemes which are likely to do best."
Jones Lang Wootton is also joint agent with Palmer McCormack for the retail warehousing element of the Blanchardstown Centre, where the developer, Green, is in the final stages of completing its second phase of retail warehousing adjoining the town centre shopping mall.
Eleven of the 13 units in the phase two retail warehouse development at Blanchardstown have been let. Michael Harrington, of Palmer McCormack, reports that negotiations are at an advanced stage on the final two units.
Retailers confirmed include Time Computers, Stauntons, Esat Telecom, Intersport, Tully Tiles, TK Maxx, Atlantic DIY, Smyth's Toys, At Home with Cleery's, Courts and the household and lighting group What?. Rental levels achieved at the Blanchardstown retail warehouses are between £13.50 and £17.50, reflecting the high specification of the units and the beneficial proximity to the highly successful main town shopping centre, says Mr Harrington. Eoin Conway, of Mason Owen & Lyons, says virtually none of the retail parks completed or under construction were on offer to investors. "Irish institutions are exceptionally keen to include retail warehousing as part of their portfolios because of the small number of good quality schemes. But developers are reluctant to sell."
According to Mr Conway, retail warehousing could produce strong yields. "There is no evidence of transactions. When retail parks come to be sold, we feel that the yields will surprise people because of its speciality use. We perceive rental growth that will harden the yield." Yields could be in the region of 6 to 6.5 per cent, he says.
When his agency began considering rental levels around 1996 for the six-unit, 36,000 sq ft Northside Retail Park, on Oscar Traynor Road, Coolock, it had anticipated levels around £8 per sq ft. The levels achieved were between £12 and £13.
Mason Owen & Lyons is also acting for the Cosgrave Property Group's Westend Retail Park development on a 22-acre site adjacent to the Blanchardstown Shopping Centre and Retail Park. The agency is already in negotiations to lease a number of the units which will vary in size from 5,000 to 30,000 sq ft and probably rent between £14 and £16 per sq ft. Because of the town centre zoning, some of these units may well finish up as food outlets. Mason Owen Lyons will also start marketing shortly for the N6 Kilmartin Retail Park, off the Athlone by-pass roundabout on the main Dublin to Galway road. This development will have six warehouses with a total of 65,000 sq ft, an 80-bedroom hotel and drive-through restaurant.
SUPPORT for retail warehousing extends across Dublin agents. Philip Owens, of Gunne Commercial observed: "It is the future but the planners need to get their act together. It's what people want. It's good for retailers because they have the opportunity to trade at lower rental levels. It's where the demand is."
A key element in the growth of retail warehousing in the Republic may also be the advent of factory outlets, already well established in the US and Europe, where consumers are drawn to the end-of-line or heavily discounted branded goods.
Elsewhere in the Republic, there are continuing signs of strong support for warehousing development. In Galway, agents Cunningham Associates are anticipating rents of around £16 per sq ft for a 20,000 sq ft retail warehouse on the site of Barry Motors beside the Galway Shopping Centre and Retail Park on the Headford Road.
Both the retail warehousing and shopping centre in Galway have been trading very successfully and Terry Cunningham says there is already considerable interest in the additional warehouse on the Barry site, due for completion in September. It will have 85 dedicated parking spaces and access to the shopping centre's 1,500 parking spaces. Green Property expects to take delivery of its £10 million Killarney retail factory outlet in the next few months.
The Killarney Outlet Centre is expected to generate rental income of £2 million from around 50 traders.
