For the second quarter of 2014, more than 61,400sq m of industrial accommodation was leased or sold over the period – a level which is over 2.5 times more than the previous quarter. The commercial property consultants said this now brings the total level of industrial accommodation signed in the capital in the first half of the year to move than 85,000sq m.
It is, however, significantly less than the circa 120,000 sq m signed in the first half of 2013, but the report – Q2 Dublin Industrial Marketview – added that the agents say that there are a number of "significant transactions in legals and due to sign before year-end which will boost take-up in the industrial sector later in the year".
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According to CBRE, there were 23 individual industrial transactions signed in Dublin in Q2 2014; 17 of these were to owner occupiers. Most of the focus of activity in the sector was on the Dublin South West (N7) corridor, accounting for 52% of all sales and lettings completed in the period, while a further 15% of transactions were situated along the Dublin South West (N81) corridor.
Interestingly, the report noted that there had been an increase in demand for accommodation, with almost 130,000sq m of industrial accommodation at the mid-year point.
As a result of the increased demand, as well as the tightening in the supply of prime facilities in the Dublin industrial sector, CBRE recorded an increase in prime industrial rents for the first time in six years to €62 per sq m in Q2 2014. In addition, inducements also tightened from a standard six-month rent-free period on a five-year lease, to between three and six months duration.
Garrett McClean, Executive Director and Head of Industrial at CBRE Ireland, said: "Take-up in the first half of the year doesn't give a true picture of the underlying level of activity in the industrial sector. We have witnessed a notable increase in demand over the last few months from occupiers and investors alike.
"The challenge is to find good quality buildings to satisfy this demand. However, even though there has been a tentative improvement in prime rental values in the most recent quarter, there is a long way to go until speculative development will be feasible Supply is therefore going to tighten further in the short to medium term until such time as rental values justify new development to occur."
(JP/IT)
