The rapid growth in retail warehousing should mean every county town or large regional catchment town will have a retail park within the next five years, according to Larry Brennan of Hamilton Osborne King.
Between 2000 and 2005, he estimates, the volume of retail space will grow to three times that built since 1995.
Retail warehouses, already well established in Dublin and Galway, are generally large purpose-built units occupied by DIY superstores and suppliers of computers, electrical goods, furniture and other large items that consumers usually need to bring home by car. Retail parks generally have three or more retail warehouses with shared car-parking.
According to research carried out by Hamilton Osborne King, there are 102 retail warehouses in the State, and 88 of these have been built since 1989.
Last February, retail warehouses accounted for 1,553,432 sq ft. Interestingly, 1,264,526 sq ft of this space is located in Dublin with the balance of 288,895 sq ft in other cities and towns. There are 13 retail parks countrywide and another 14 with 1,724,356 sq ft are planned for completion before the end of 2002. Nine of the parks in the pipeline will be outside Dublin and will have a total of 1,044,613 sq ft. The five parks with 697,743 sq ft planned for Dublin will, like most of the existing parks, be built in the northern and western suburbs.
One characteristic of retail parks is their combination of high spend levels and low transaction numbers - in other words, consumers may go to their nearest DIY superstore and garden centre only twice a year but will spend a lot of money there. Planning requirements for most of these outlets have a "bulky goods" specification - this precludes the sale of clothing, but leisure chain stores usually sell sportswear in addition to equipment.
A major consideration in the location of a new retail park is the number of people in its catchment area. Michael Conroy of Hamilton Osborne King says the catchment is now considered to be anywhere within a 40-minute drive of the site as people are prepared to travel farther to retail parks than to regular shopping centres. Proximity to the road network is also a priority: publicity for the Liffey Valley shopping centre, with its adjacent retail park, emphasises its location "where the M50 meets the N4". Similarly, a retail park in Athlone is known as the Kilmartin N6 centre.
The Government has issued draft limitations on the size of retail warehouses which are due to be either amended or ratified in the near future. At present, they are not permitted to exceed 64,560 sq ft. Michael Conroy says while most local authorities are now approving of retail parks, the planning guidelines in county development plans require clarification. While they undoubtedly take some trade from town centres, developers and their agents argue that in the dynamic world of retailing, this leaves more room in the shopping streets for small, specialist and new traders, and reduces consumers' need to drive into city centres.
The trend towards edge-of-town retailing is countrywide. In Waterford, retail warehouses are being built on the Cork and Tramore roads outside the city, and one of the largest retail parks in the North is planned for the Waterside area of Derry. All 72,000 sq ft in the retail park that is to open in Newbridge, Co Kildare, next spring have been let by Hamilton Osborne King, which is also negotiating the letting of retail space in Longford, Mullingar, Letterkenny, Liffey Valley and Dundalk.
Retail investments, particularly those in retail parks, says Larry Brennan, are currently seen as more solid performers than industrial developments. The annualised total return from retail warehousing for the period 1996-99 was 29.4 per cent, and the rental value growth for the same period was 12 per cent.
Private investors are constantly chasing some of the provincial retail warehousing, which has valuable capital allowances. In the cities, the institutions are always competing for retail warehousing. A few weeks ago, two institutions, the Irish Pension Fund Property Unit Trust and Irish Life Assurance agreed to pre-fund the development of the Airside Retail Park near Swords at a cost of £50 million. The deal will give them a yield approaching 6 per cent.
