"Severe shortages" in industrial market
More than 60,000 sq m of industrial space was taken up in the first three months of this year, but the market is now being hit by a shrinking supply of space in suitable locations and it is beginning to cause issues in the market.
Data from CBRE shows 64,747 sq m (696,930 sq ft) of industrial space was occupied between January and March in the Dublin area.
There were 47 transactions in total during the quarter. Some 46pc of the transactions signed in this sector in Q1 2016 comprised sales with the remainder comprising lettings.
The supply of modern industrial and logistics accommodation in prime locations has fallen dramatically in recent months, which in turn is impacting on occupier activity with take-up in Q1 2016 down 25pc on the same quarter last year, warn CBRE
According to CBRE Industrial director Jarlath Lynn, transactions were primarily focused on the Dublin South West (N7) corridor, which accounted for 42pc of all sales and lettings completed.
"A further 16pc of the industrial accommodation that either let or sold in Dublin during the first quarter was located along the Dublin North (N2) corridor while 15pc of Q1 2016 take-up occurred along the Dublin North West(N3) corridor," he added.
The majority (43pc) of industrial take-up in the capital in Q1 2016 comprised transactions of between 1,858 sq m and 4,645 sq m in size. A further 23pc of take-up in Q1 comprised transactions that extended to between 4,645 sq m and 9,290 sq in size. However, unlike several quarters in 2015, there were no large transactions extending to more than 9,290 sq m (100,000 sq ft) in size signed in the quarter.
With many large industrial requirements fulfilled during 2015, the overall volume of demand in this sector fell quarter-on-quarter. There was more than 50,000 sq m of demand for industrial accommodation by the end of March.
Prime headline industrial rents remained stable at approximately €75 per square metre during Q1 2016 but are expected to rise by as much as 25pc during 2016 as the supply of modern accommodation dwindles further. Of the more than €735m invested in Irish income-producing assets with a value of more than €1m in Ireland in Q1 2016, only 2pc comprised industrial investments specifically with industrial investment spend down quarter-on-quarter following a strong Q4 2015. Prime industrial yields in the capital are stable at approximately 5.75pc at the end of Q1 2016.
CBRE Ireland head of research Marie Hunt commented: "Although there was a healthy volume of leasing activity concluded in the industrial sector in the first quarter of 2016, this could have been considerably higher if there was sufficient stock available to satisfy occupier requirements. It is clear that there are severe shortages of modern industrial accommodation in some locations. Since the beginning of the year, there has been more discussion about speculative development in this sector although we don't expect see this materialising to any great degree until such time as rents rise above current levels and render development viable".
Dublin unit up for rent
William Harvey & Co. has been retained to let a mid-terrace industrial facility with facing onto Ballymount Road in west Dublin.
The facility at Unit B5 of the Dockrell's Complex extends to a total gross external floor area of 1,231 sq m (€13,250 sq ft) and is situated in a at the estate's entrance next to Wurth and Munster Joinery.
The property is to let on "flexible terms" at a quoting rent of €70,000 per annum (exclusive).
The production area is said to be of "solid construction with block to full height" and a clear internal height of 6.65m as well as loading access via two grade loading doors, which are at each end of the property.
The roof is twin skin insulated metal deck and the space benefits from high output lighting.
There are also a three tonne and a five tonne gantry crane included which span 16m. This unit is within a gated development with around the clock security.
"The Dockrell's Complex is strategically located within 1km both the M50 / Naas Road (N7) Interchange (Junction 9) and M50 / Ballymount Interchange (Junction 10).