The average rental value for prime industrial space currently stands at €5 to €7 per sq ft (€55 to €75 per sq m) in the Dublin area, compared to €110 - €135 per sq m in 2007.  This, combined with the incentive of 12.5% corporate taxes in Ireland against a European average of circa 30%, has seen new international entrants to the market.

Savills confirms vacancy rates in Dublin are also slowing from the record high of 1.3 million sq m in September 2008 in response to these transactions.  The firm has leased space to Spanish tiling company Cosentino, new to the market in Dublin, who rented 30,000 sq ft at €155,000 per annum in June, expanding UK logistics firm UTi and German logistics company GLS, who relocated to Dublin’s Stadium Business Park to rent 75,000 sq ft at €391,000 per annum. These deals represent three of the most significant lettings of 2010 in properties that had been vacant for only six months or less, compared with over half of available stock which on average remains vacant for more than 18 months.

Gavin Butler, industrial division director at Savills in Dublin, says: “With the exception of a handful of sales, nearly all of the deals in 2010 have been lettings. Tenants and occupiers will continue to have the upper hand in negotiations, and flexibility on lease lengths and rental levels will be key for landlords in doing deals. Next year will see an increase in the number of sales, however lettings will continue to dominate activity in the industrial property sector.”

Savills notes there has been a downturn in the number of owner occupier transactions, due to the lack of finance available in the market.

For further Information, please contact:
Gavin Butler, Savills, +353 (0) 1 6181340
Victoria Cambridge, Savills press office, +44 (0) 20 7409 8940