A shortage of industrial stock in Dublin is threatening take up, according to the latest market view report by commercial property consultants CBRE Ireland.
CBRE said 54,988m2 of take-up was recorded in the Dublin industrial and logistics sector during the second quarter of 2016, bringing total take-up in the first half of 2016 to 119,705m2.
This is down 35 per cent on the volume of take-up achieved in the first half of 2015.
Head of Research at CBRE Ireland Marie Hunt said industrial take-up during the second quarter and in the first half of 2016 has been somewhat lower than the record volumes of activity achieved last year.
“However, this is reflective of a severe scarcity of modern accommodation in core locations, as opposed to a weakening in demand levels with demand for accommodation up significantly quarter-on-quarter,” said Ms Hunt.
The report shows there were 49 individual industrial transactions signed in Dublin in the second quarter of the year bringing the total number of transactions in the first half of 2016 to 96.
45 per cent of the transactions signed in this sector in the second quarter comprised sales with the remainder comprising lettings.
CBRE say that with prime industrial rents continuing to edge upwards, the viability of new development will ultimately improve.
Director in the Industrial department at CBRE Jarlath Lynn said prime industrial headline rents in Dublin are now in €85 per square metre and are on target to reach €94 per square metre during the second half of 2016.
“As a result of increased rents, we expect to see some speculative development activity emerging wihin the next few quarters, which will begin to alleviate supply pressures. In the meantime, many occupiers will have no option but to continue to pursue ‘design and build’ solutions to satisfy their requirements,” said Mr Lynn.
Transactional activity in the industrial sector during the second quarter of the year was primarily focused on the Dublin North East (N1/M1) corridor, which accounted for 35 per cent of all sales and lettings completed in Dublin in the three month period and 22 per cent of all activity in the first half of 2016.
A further 20 per cent of the industrial accommodation that either let or sold in Dublin during this period was located along the North West (N3) corridor while 19 per cent occurred along the Dublin South West (N7) corridor.
