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Strong industrial sales as interest sharply increases

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The former Creative Labs facility in west Dublin

The former Creative Labs facility in west Dublin

The former Creative Labs facility in west Dublin

THREE industrial properties have recently gone sale agreed in multi million euro deals.

Two of these are industrial development sites in south west Dublin. Located at Baldonnel Business Park, the larger of the two plots consists of 31.33 acres which had a guide price of €3.25m, which equates to €103,700 per acre.

The second plot of 2.85 acres had a guide price of €1m or almost €351,000 per acre reflecting its higher visibility frontage onto the N7, facing towards CityWest.

Joint agents CBRE and Savills confirmed that these plots have gone to sale agreed but declined to comment further on the prices or identities of the purchasers.

It is considered hugely significant that bidding activity on the lots came from both developers and owner occupiers who are interested in acquiring land for industrial development which in turn augurs well for job creation in the manufacturing and logistics sectors. Baldonnel Business Park was originally developed by SIAC in the 1990s. The joint agents are still actively marketing a 2.31 acre plot at the park for which they are guiding a keener price of €165,000 per acre.

Meanwhile CBRE's industrial director Garrett McClean has also recently agreed terms on the sale of the former Creative Labs office and industrial facility in Ballycoolin, Dublin 15 in west Dublin.

Located on a 10.9 acre site with development potential, the high specification headquarter type facility at the entrance to Ballycoolin Business Park had a guide price known to be in excess of €4m.

The building extends to 11,830 sqm, of which the ground floor offices extend to 2,015sq m, first floor offices to 2,015 sq m, shipping office over dock levellers to 270 sq m. and the remaining 7,000 sq m is a modern high bay warehouse.

Elsewhere, one of the largest industrial investments currently on the market is the former Fruitfield facility in Tallaght has attracted a number of offers.

Joint agents CBRE and William Harvey are guiding €4.25m and are talking to a number of interested parties.

It is expected that a deal can be agreed to close in time for the CGT December 31 deadline.

Extending to 149,457 sq. ft. on an 11.17 acre site. the building is currently generating a short term rental income of some €340,358 per annum exclusive and has 65,660 sq ft of warehouse area vacant, so there's good potential to increase the rental income.

On the other hand it may appeal to developers as the current tenants have signed deeds of renunciations and a large portion of the site is earmarked for mixed use re-development (including part residential) in Tallaght's Local Area Plan.

Meanwhile there are signs that the pick-up in the construction and housing market is having a knock on effect on demand for trade counter type industrial properties from firms providing building and DIY supplies, according to Cathal Daughton of Lisney.

"Demand across the industrial sector has picked up for modern facilities and about half a dozen firms have requirements for units of around 100,000 sq ft.

While these could be met from existing stock, there is a limited supply of modern units in the 50,000 to 80,000 sq ft size," he adds.

This may become one of the first areas targeted by developers while others are seeking older units for refurbishment

He reckons that older stock is selling for around €25 to €30 per sq ft while modern units are selling for between €45 and €60 per sq ft.

Even wider price ranges were seen for industrial lots at last week's Allsop Space auction.

A Dublin City centre garage/workshop property sold under the hammer for €650,000. Located at the northern end of Bolton Street close to the junction of Dominick Street Lower, the premises extends to only 861 sq ft and is let to Bolton Street Services on a lease which is not due to expire until 2028.

Its rent is €28,800 a year equating to a gross yield of only 4.43pc. This suggests that the purchaser has an eye to the development potential of the 0.14 acre site and as the price equates to around €4.6m per acre.

Reflecting the recovering demand for trade counter property, a mid-terrace property, Unit 34 Airton Terrace, Tallaght, Dublin 24 sold for €230,000 in the auction. With a total floor area of 5,204 sq ft this property is sold for the equivalent of about €44 per sq ft. It was let on a short lease of €20,000 a year equating to a gross yield of 8.7pc.

A more realistic gauge of prices for small modern terraced Dublin industrial units may be in the €26 to €33 per sq ft range suggested by two Dublin 15 units which were auctioned.

The stronger price was seen for an investment property Unit 5, The Business Centre, Northwest Business Park, Phase 3, Ballycoolin. The improved terms came even though it is slightly smaller.

A modern warehouse unit with two storey office accommodation extending to 5,490 sq. ft, it sold for €180,000 or €32.70 per sq ft. It has the advantage of being let to Power Plex Technologies Limited for a term of 20 years from May 2012 at a current rent of €14,625 per annum equating to a gross yield of 8.13pc.

The other Dublin 15 property, Unit B2 also known as Unit 18F Rosemount Park Drive, Rosemount Business Park, Blanchardstown, was vacant and sold for €165,000 which is €26.20 per sq ft.

Its accommodation included 1,364 sq ft of offices split between ground and first floor in addition to 4,950 sq ft of warehouse space.

A much more generous yield of 15.4pc was seen for Unit B13 Santry Business Park, Santry, Dublin 9, a mid terrace warehouse unit let to Aerfas Int Ireland Ltd for €12,300 a year.

But as the unit was a compact 1,226 sq. ft including office space, its price of €80,000 works out at as much as €65.2 per sq ft.

Richard O'Neill of Allsop Space says that outside of Dublin, prices averaged €25 per sq ft in last week's auction which saw 22 regional industrial lots with total floor areas of 311,000 sq ft, sell for a combined €4.98m.

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