Dublin Industrial Market Q2 2018: In what represented a sluggish quarter for the industrial property market, just 43,854 sq m of space transacted – a decrease of 37% in comparison with the same quarter last year – bringing take-up for the first six months of 2018 to 111,754 sq m. This is despite the fact that occupier demand for industrial property remains strong as evidenced by
the fact that the volume of exports rose by 19% in the year to May 2018.
With a number of large transactions currently in the pipeline, we anticipate that volumes in Q3 and Q4 will represent a more accurate reflection of underlying activity levels. Lettings accounted for 75% of transactions in Q2 compared to 25% for sales.
Looking at the geographical spread of activity within Dublin, demand for space was the highest in the South-West with the area accounting for 51% of take-up. This was primarily due to global access solutions provider Instant UpRight’s taking of 9,423 sq m in 2007/2008 Orchard Avenue in the Citywest Business Campus. This deal accounted for approximately 21% of the entire take-up for Q2 and was more than double the size of the next biggest transaction, significantly raising the South-West’s share of take-up. The North-West comprised the next largest share with 43% of take-up and the remaining four of the top five deals.
Delving into take-up by deal size illustrates the extent to which the lack of larger transactions is holding back the overall volume of take-up. Deals of less than 2,500 sq m encompassed 55% of total space let, 23% of deals were between 2,501 sq m and 5,000 sq m, 21% were between 5,001 sq m and 10,000 sq m, while there were no deals in excess of 10,000 sq m.
The lack of larger transactions in the market can be attributed to a shortage of good quality, modern facilities. This has put upward pressure on secondary rents which now stand at €60-€70 per sq m, an increase of 9% in comparison to last quarter.
