Logistics firms, pharma companies and large retailers have snapped up almost all the new industrial space being built in Dublin.
Between April and June, 89pc of the 459,000 square foot of new space completed in the quarter was pre-let, according to a survey by property agent Savills.
The largest deal of the quarter was Dunnes Stores’ expansion into a 78,400 square foot space in Stadium Business Park in Finglas.
Third-party logistics provider GLS, US clinical packing specialist Yourway and pharmaceutical firm Clinigen also expanded their presence.
Take-up in the market totalled 1.3 million square feet in the first six months of the year, despite fears of an economic slowdown, Savills said.
The industrial and logistics market has been heating up due to a lack of supply, particularly for smaller units.
Only one small deal was signed in the second quarter – for a unit of between 5,000 and 10,000 square feet – the lowest take-up since the 2008 financial crisis.
Despite this, construction activity in Dublin’s industrial property market has reached a 20-year high, according to commercial real estate company Cushman & Wakefield.
While there is less space available than at any point since 2002, more space has been added so far this year than in all of last year.
Almost two-thirds (61pc) of the space under construction has been pre-let or pre-sold, including to German freight firm DB Schenker, the Office of Public Works and retailer LifeStyle Sports.
“We expect to see more transactions as units get closer to completion,” said Cushman & Wakefield’s chief economist, Kate English.
“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 shortage of space and spiralling construction costs are pushing up rents but not denting demand in the market, said Brendan Smyth, Cushman & Wakefield’s head of industrial and logistics.
Dublin prime rents were at €115 per square metre at the end of June.
“This is being absorbed by the market, with further rental growth expected in the coming months,” he said.
“Confidence within developers of new build logistics space remains high, as the market is struggling to provide sufficient buildings to meet market demand.”