LETTINGS IN the Dublin industrial market fell by 33 per cent in 2009 – the most serious decline for many years.

Take-up of space in the Dublin area last year reached 110,000sq m (1.184 million sq ft) compared to 147,000sq m (1.582 million sq ft) in 2008, according to a new report from Savills. During 2009 the trend towards lettings rather than sales accentuated further with 90 per cent of take-up activity in lettings.

Joan Henry, head of research at Savills Ireland, said their study also showed a significant increase in available space – from 692,000sq m (7.448 million sq ft) at the beginning of 2009 to more than 1 million sq m (10.763 million sq ft) at the start of this year.

She said the 47 per cent increase in available space was largely due to the fact that tenants were now exercising break options and were not renewing leases when they expired. Occupiers were consolidating their operations into existing branches and depots to reduce their cost base.

Apart from the recent SR Technics lease of a hangar at Dublin Airport to Aer Lingus, the next biggest deal last year was a design-and-build contract for a 16,800sq m (180,834sq ft) building at Aerodrome Business Park, just off the N7.

Gavin Butler of Savills industrial division says competition among landlords will intensify in the first half of 2010 because of the larger volume of stock on the market. This will put pressure on rents and force landlords to deliver more flexible terms.

The Savills report forecast that it would be 2011 before there was any significant increase in take-up. The fact that the largest deal in 2009 accounted for almost 20 per cent of total take-up meant that the overall figure for 2010 may be lower at 80,000 to 100,000sq m (861,112 to 1.076 million sq ft).