Activity In The Dublin Industrial Market Still Trailing Last Years Bumper Performance Despite Strong Q3

Dublin, 13th October 2016 Commercial property consultants CBRE Ireland have released statistics on the volume of activity in the Dublin industrial market in the third quarter of 2016. According to CBRE, 92,425m2 of take-up was recorded in the Dublin industrial sector during the third quarter of 2016, reflecting a 68% uplift in activity quarter-on-quarter by virtue of a number of large transactions that signed in Q3. This follows disappointing levels of take-up in the first half of the year.

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There were 40 individual industrial transactions signed in Dublin in the quarter bringing the total number of transactions in the first three quarters of 2016 to 136.

61% of the take-up recorded in the industrial sector in Q3 2016 comprised lettings with the remainder comprising sales. Despite the volume of activity recorded in Q3, industrial take-up in the first nine months of 2016 is down 31% compared to the record volumes of activity achieved in the same period last year. This is reflective of a severe scarcity of modern accommodation in core locations, as opposed to a weakening in demand levels. Prime headline rents in Dublin remain unchanged at €85 per square metre at the end of Q3. CBRE expect to see further upward pressure on prime industrial rental values before year-end, which will improve the viability of new development in this sector and should see an increase in speculative development in due course.

Transactional activity in the industrial sector during Q3 2016 was primarily focused on the Dublin South West (N7) corridor, which accounted for 49% of all sales and lettings completed in Dublin in the three month period. A further 28% of the industrial accommodation that either let or sold in Dublin during Q3 was located along the Dublin North East (N1/M1) corridor while 17% of industrial take-up in Dublin in Q3 occurred along the North West (N3) corridor.

By virtue of some large industrial transactions that completed during the quarter, more than 80% of Q3 take-up extended to more than 1,858m2 (20,000 sq. ft.) in size. 33% of take-up in the industrial sector in Q3 comprised transactions that extended to more than 9,290m2 (100,000 sq. ft.) in size. A further 32% of industrial take-up in the capital in the quarter comprised transactions of between 1,858m2 and 4,645m2 (20,000 – 50,000 sq. ft.) in size.

There was more than 110,000 square metres of demand for industrial accommodation prevailing at the end of Q3 2016 of which two thirds was focussed on the Dublin South West (N7) corridor in particular. A further 15% of demand at the end of Q3 was focussed on the Dublin North (N2 corridor).

Appetite for good industrial investment opportunities remains strong although supply is still very constrained, particularly for larger lot sizes. Of the €3.18 billion invested in Irish income-producing assets with a value of more than €1 million in Ireland in the year to the end of September 2016, only 2% comprised industrial investments specifically. Although industrial investment spend in Q3 was up quarter-on-quarter, there were just two industrial investment sales completed during Q3 2016, the largest of which was an off-market transaction extending to approximately €18 million. CBRE say that prime industrial yields in the capital are stable at approximately 5.75% at the end of Q3 2016.

CBRE say that many occupiers who are net exporters to the UK and exposed to recent fluctuations in Sterling and are unlikely to make large expansion or relocation decisions in the short term until the landscape is somewhat clearer.

According to Jarlath Lynn, Director in the Industrial department at CBRE Ireland, 


Jarlath Lynn,  Director, Industrial Agency, CBRE Dublin
“We expect to see continued activity in this sector in the final quarter of 2016 although with supply shortages continuing to prevail, we expect to see further tightening in tenant inducements in leases over the course of the coming months. We also expect to see prime industrial rents rising further by year-end.”
Jarlath Lynn, Director, Industrial Agency, CBRE Dublin

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 165 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, business rates and compulsory purchase, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie/ni.