AN estimated 750,000 square feet of industrial space is being built in Dublin on a speculative basis, according to agents Hamilton Osborne King.
Paul McNeive of the agency says in the company's newsletter, Property Outlook, the quickening increase in construction may soon reach the point where developers begin to delay further new starts pending the success of the new crop. There is still room for another significant small unit scheme in the Naas road area and for larger units in particular locations. Rents for new buildings are ranging from £5.50 to £6 per square foot - though rents of £6.50 to £8.50 are being quoted in two new schemes.
Mr McNeive says the demand for industrial space remains strong with the vast majority of occupiers preferring to purchase rather than lease because of the low interest rates. Vacancy rates remain low at around 5 per cent of stock.
Dealing with the investment market, Ian French says that steadily rising rents and continuing low interest rates have brought property back into favour with investors. There has been solid growth in activity with more buyers keen to invest. Improved market conditions are encouraging vendors to bring property to the market.
In contrast to the poor performance of offices in recent years, Mr French forecasts that this sector will return the best performance this year. In the longer term, industrial property will be the top performer, though at the moment opportunities are limited as low interest rates encourage occupiers to purchase their own premises.
