Take-up in the industrial market up 9.8% on 2017

Take-up in the industrial market last year – boosted by demand for logistics space to service the march of online retailing – was up 9.8 per cent on 2017.

This is according to the latest research from Savills which puts full-year take-up of industrial space at 308,659sq m – 17.7 per cent above the long-term average for the market.

The report also points to the re-emergence of speculative development in the sector with 10 new logistics facilities – comprising 50,560sq m (544,223sq ft) of space – being completed in Dublin during 2018.

“It is anticipated that construction will commence on at least a further 70,000sq m in 2019, with over 50,000sq m of this already pre-let or pre-sold,” according to the report.

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“Strong occupier demand, combined with all-time low vacancy rates, have been the key drivers of a return to new development over the last two years.

“There continues to be a significant gap between new-build and second-hand prices. However, we see this gap diminishing significantly in 2019 as strong levels of interest continue to drive second-hand values.”

Nearly two-thirds of letting activity took place in the second half of last year. There were six lettings last year for more than 10,000sq m (107,639sq ft) but three of these were in the final quarter of the year. These included the pre-letting of 16,537sq m to Home Store & More at Baldonnell Business Park in Dublin 22; 10,219sq m at Kilcarbery Business Park in Dublin 22; and 16,888sq m at Cloverhill Industrial Estate.

The report puts headline rents in the sector at €100 per sq m per annum while the weight of money seeking income-producing logistics premises has compressed prime yields to 5-5.25 per cent.

Meanwhile, Savills is quoting €1.1 million for an industrial and office unit at 32-34 Finglas Business Centre in Finglas, Dublin 11. It has about 1,244sq m (13,390sq ft), including 105sq m (1,130sq ft) of two-storey offices, a clear internal height of 7.2m and three ground-level roller shutter doors.

The property also comes with a 5-tonne overhead gantry crane with a width span of about 20m. The crane is on a steel frame structure with the rail being about 40m long.

The property is located off Jamestown Road 8km north of Dublin city centre and 2km from the junction of the N2/M50.