More industrial and logistics property is under construction in the Dublin region than at any point since 2002, according to new research by commercial property company Cushman & Wakefield.
As availability levels are at a 20-year low, the figures show the market is responding to a pent-up demand for modern, high-quality space, demonstrated by the 61,000sq m of new space sold or leased by an occupier in the second quarter of this year alone.
Cushman & Wakefield expects that 74,085sq m of new industrial and logistics space will be completed and added to the Dublin market by the end of June.
That would surpass the total completed in 2021 and be one of the highest volumes since 2008.
Markets in Vienna or Christmas at The Shelbourne? 10 holiday escapes over the festive season
Ciara Mageean: ‘I just felt numb. It wasn’t even sadness, it was just emptiness’
Stealth sackings: why do employers fire staff for minor misdemeanours?
Carl and Gerty Cori: a Nobel Prizewinning husband and wife team
Some 88 per cent of this was let to an occupier before or upon completion, emphasising the significant demand in the market. Some examples of these include DB Schenker, the Office of Public Works and LifeStyle Sports.
Development activity is expected to continue in the industrial and logistics market during the second half of the year. A total of 228,200sq m was under construction as of the end of June, with expected completion dates ranging from 2022 to 2023.
Cushman & Wakefield chief economist Kate English said: ‘’Almost 61 per cent of space under construction is already pre-let or pre-sold to an occupier, with pre-lets proving much more popular. Further units have terms agreed and we expect to see more transactions as units get closer to completion. This would be in line with patterns we have observed over most recent quarters.
“The sum under construction is substantial. It is the highest volume of space under construction since 2002, which will be welcome news to potential occupiers as this space is needed.”
The research also found that industrial and logistics units of all sizes and in all locations continued to see rental growth as competition remains high for a very limited number of units.
The sector as a whole is undergoing “an evolution”, according to Cushman & Wakefield, with the rise in demand evident not only within Dublin, but also across most other European markets.
Dublin prime rents are at €115 per sq m as of the end of the second quarter of this year, with further rental growth expected over the remainder of the year.
Brendan Smyth, head of industrial and logistics at Cushman & Wakefield, said confidence within developers of new build logistics space “remains high” as the market is struggling to provide sufficient buildings to meet market demand. “While construction inflation is pushing up the cost of new builds and subsequently rents, this is being absorbed by the market with further rental growth expected in the coming months,” he added.
Cushman & Wakefield is among the largest real estate services firms with approximately 50,000 employees in 400 offices and 60 countries.
