Industrial rents stabilise
The challenges facing the industrial property market are spelt out in two reports published today. Both show average prime rents in the sector at around €60 per sqm.
Joan Henry, Savills' director of research, says: "Rents have adjusted considerably as tenants successfully negotiate better deals."
Prime rents are now not far ahead of secondary rents at between €40 and €60 per sqm per year "while deals on tertiary premises are in some cases being done as low as €20 per sqm a year", she adds.
Meanwhile, rival agency CB Richard Ellis estimates prime Dublin industrial headline rents at €65 per sqm and secondary rents at €43 per sqm.
Garrett McClean of CBRE adds that he expects prime rents to stabilise at around €60-€65 per sqm this year. He also forecasts further downward pressure on rents for older premises and that prime provincial rents are now averaging €37 per sqm.
Joan Henry forecasts take-up of between 125,000 to 175,000 sqm this year.
This compares with 141,000 in 2011 which in turn was 35pc below 2010 levels.
She also expects receivers to dominate supply of Irish industrial property this year while the information technology sector is expected to drive demand.
"Market conditions in the industrial sector remain challenging as high vacancy rates drive competitive rents and lease terms," she adds.