Notable Increase In Demand In The Dublin Industrial Sector in Q3
Dublin, October 9th, 2017 – Commercial property consultants CBRE Ireland today released statistics on the volume of take-up recorded in the Dublin industrial & logistics market in the third quarter of 2017. According to the property consultants, 48,863m2 of take-up was recorded in the Dublin industrial & logistics market during the third quarter of 2017, bringing total take-up in this sector in the first three quarters of 2017 to almost 170,000m2. This is down approximately 20% on the volume of activity achieved in the first three quarters of 2016, with a scarcity of modern premises continuing to compromise take-up volumes. There were 38 individual industrial transactions signed in Dublin in Q3 2017, bringing the total number of transactions in this sector in the first nine months of 2017 to 121. This is compared to 136 transactions signed in the same period last year.
63% of the total volume of industrial take-up recorded in Dublin in Q3 2017 comprised lettings with 24 of the 38 transactions signed in the period comprising lettings. In the first nine months of the year, 55% of the take-up recorded in the industrial and logistics sector in Dublin comprised lettings.
Prime rents remained stable quarter-on-quarter at €99.50 per square metre (€9.25 per sq. ft.) at the end of Q3, having increased by 6% since the beginning of the year. Prime rental values are now at levels that justify new development which is leading to increased appetite for industrial land and an increase in planning applications for industrial & logistics schemes over recent months.
Transactional activity in the industrial & logistics sector during Q3 2017 was primarily focused on the Dublin North West (N3) corridor, which accounted for 30% of all sales and lettings completed in Dublin in the three-month period. A further 26% of the industrial accommodation that either let or sold in Dublin during Q3 was located along the Dublin South West (M7) corridor while 19% of industrial take-up in Dublin in Q3 occurred along the Dublin North East (M1) corridor.
20% of Q3 take-up in the Dublin industrial market extended to more than 9,290m2 (100,000 sq. ft.) in size. Meanwhile, the largest majority (47%) of activity in the three-month period comprised transactions of between 1,858m2 and 4,645m2 (20,000 sq. ft. – 50,000 sq. ft.). Meanwhile, 15% of industrial take-up in the capital in Q3 comprised transactions of between 929m2 and 1,858m2 (10,000 – 20,000 sq. ft.) in size.
The overall volume of demand in the industrial sector rose significantly quarter-on-quarter. There was more than 117,000m2 of demand for industrial accommodation prevailing at the end of Q3 2017 of which 22% was focussed on the Dublin North (M1) corridor in particular while a further 16% specifically expressed a preference for premises along the Dublin South West (N7) corridor. Interestingly, 57% of demand at the end of Q3 was focussed on ‘any Dublin location’ and didn’t have a preference for a particular location.
Appetite for good industrial investment opportunities remains strong, buoyed to some extent by rental growth expectations in this sector. However, the supply of industrial investment opportunities remains constrained, particularly for larger lot sizes. Of the €1.3 million invested in Irish income-producing assets with a value of more than €1 million in Ireland in the first nine months of 2017, 7% comprised industrial investments specifically while industrial investments accounted for 6% of investment spend in Q3.
According to CBRE, prime industrial yields in the capital are stable at approximately 5.5% at the end of Q3 2017 and are expected to remain stable for the foreseeable future.
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
CBRE U.C., (CBRE Ireland) registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company with offices in Dublin and Cork. Currently employing over 135 employees, we work with occupiers, investors and developers of office, industrial and logistic, retail, hotel and healthcare property, providing strategic advice and execution for property sales and leasing; tenant representation, corporate services; property and project management; appraisal and valuation; development services; investment management and debt advisory; business rates and compulsory purchase and research and consulting. Please visit our website at www.cbre.ie