Friday 24 May 2019

Strong Q1 for capital's industrial and logistics property market

Valuable deal: Dublin Airport Logistics Park in Finglas was sold by Eason for €19m
Valuable deal: Dublin Airport Logistics Park in Finglas was sold by Eason for €19m
Donal Buckley

Donal Buckley

Dublin's industrial and logistics property market started the year with a strong first quarter, according to research by property consultants CBRE, with 95,623 sq m of space taken by occupiers. That's a 1pc increase on the previous quarter, which itself was considered strong.

Garrett McClean, executive director at CBRE Ireland, says 33 individual industrial transactions were signed in Dublin in Q1 2019. Lettings accounted for 24 of them, with purchases accounting for nine.

The most valuable deal saw Eason sell the vacant Unit 1 in the Dublin Airport Logistics Park in Finglas to Irish investment fund Iput for €19m. Iput is undertaking a major refurbishment of the unit which extends to 17,176 sq m (184,886sq ft) and sits on 8.4 acres. Letting agency Harvey is quoting €1.665m, which equates to €9 per sq ft.

Prime industrial rents in the capital remained stable at €106 per square metre (€9.85 per sq ft) at the end of March. However, Mr McClean expects prime industrial rents to rise by 6.5pc by the end of this year.

CBRE's research shows that transactional activity during the first quarter was primarily focused on Dublin's south west corridor around the N7 dual carriageway, as it attracted 33pc of all sales and lettings during the period. The Dublin north corridor (M2) also performed strongly, with 31pc of take-up. A further 27pc was located along the Dublin north east corridor (M1).

Larger occupiers led the market as 41pc of deals comprised transactions that extended to more than 9,290 sq m (100,000 sq ft) in size, while a further 20pc comprised transactions that extended to between 1,858 sq m and 4,645 sq m (20,000-50,000 sq ft). Meanwhile, 13pc comprised transactions that extended to between 4,645 sq m and 9,290 sq m (50,000-100,000 sq ft).

The emergence of several new expectations in recent months has boosted demand to more than 118,000 sq m at the end of March. A feature of this demand is the strong appetite for good industrial investment opportunities, buoyed in part by further rental growth expectations.

However, although there was almost €600m invested in income-producing assets with a value of more than €1m in Ireland, the Irish market did not see any industrial investments of more than €1m completed during the quarter.

Subsequently, an industrial property near Rosslare port in Co Wexford sold for €1.05m at a BidX1 auction earlier this month. Let to Advanced Environmental Solutions (Ireland) Limited, it generates annual rent of €120,000, equating to a gross yield of more than 11.4pc. Its lease provides for upward-only rent reviews. Advanced Environmental Solutions is a subsidiary of State-owned Bord na Móna.

Located at Kilrane Business Park, the mainly warehouse premises extends to 26,314 sq ft and is located on a 1.36-acre site.

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