Intense competition among DIY retailers to anchor a new retail warehouse scheme -The Park - in south Dublin has led to strong rents being agreed. Jack Fagan, Property Editor, reports
South Dublin's first large scale retail warehousing park has been given a kick-start with the emergence of Woodies DIY to trade out of what will be their largest store in the country with a floor area of 6,000 sq m (64,584 sq ft).
The company had to tender against other DIY traders for the anchor unit in The Park, which will be strategically located beside the Carrickmines intersection of the M50 in Dublin 18.
Development work on the first phase of the 50-acre park has already got under way and present indications are that it will begin trading in the autumn of 2005.
The project will also include a large office element as well as two hotels, restaurants, a motor mall, leisure centre, neighbourhood shopping and a conference centre with an end value of €500 million.
The company behind the complex, Park Developments, is one of the largest and most successful privately owned development firms in the country with substantial interests in both the commercial and residential sectors. Run by Michael Cotter, it was also responsible for the highly innovative Fashion City at Ballymount, off the M50, which attracted virtually all the major wholesale fashion companies from the congested city centre.
The high level of interest in the anchor store at The Park meant that the promoters were always going to have to put it out to tender.
Mark Reynolds of Hamilton Osborne King says the stgrong rent secured for the anchor store reflects the prime loction and the scarcity of retailing opportunities in south Dublin.John Costello of Costello Commercial advised Woodies whose parent company Grafton is involved in a takeover bid for rival Heatons.
Fears by Irish DIY firms, like Woodies, that they might suffer because of competition from the giant multiple B & Q have proved wide of the mark.
B & Q has certainly done well at its Liffey Valley outlet but, by all accounts, it is now suffering because of its success.
Service in the store can be slow and even after long waiting periods, customers sometimes find that the stock they need is not readily available.
A staff member handling bookings for new kitchens has been telling callers that they will have to wait at least three-and-a-half weeks for an appointment to order kitchens.
With Woodies committed to The Park, the promoters can now move ahead with letting eight other retail warehouses ranging in size from 705-1,776 sq m (7,590 sq ft-19,117 sq ft) and totalling 15,000 sq m (161,458 sq ft).
Rents will range from €350 to €377 per sq m, depending on size and location of the building. There is already considerable competition between many of the top multiples for units in The Park because of its proximity to densely populated middle and upper class areas.
HOK has already agreed to sell a 2,865 sq m (30,840 sq ft) leisure centre, including a 25-metre swimming pool. Two motor showrooms to be built at the front of the site will also be sold to leading car distribution companies.
One company is paying around €7 million for a two-acre site and construction costs for a double height showroom which will have a floor area of 1,200 sq m (129,167 sq ft).
Retail warehousing is now the fastest growing business in the commercial property sector.
After blocking this shopping model for years, planning authorities are now approving a large number of schemes - several provincial towns are set to have at least two retail parks - to bring in badly needed rates revenue to local authorities.
Retail warehousing has a broad appeal because it allows shoppers to move away from congested cities and town centres for bulky items, such as furniture, carpets and white goods.
Park Developments has one of the most valuable residential and commercial land banks in the Dublin area. It bought the Carrickmines land more than four years ago for €46.35 million.
