Prime Dublin Industrial Rents Increased For The First Time In Six Years In Q2 2014
Supply continuing to tighten with no speculative development anticipated
Dublin, 11th July 2014 – Commercial property consultants CBRE today released their Q2 Dublin Industrial Marketview showing an overall improvement in the sector following a particularly slow first quarter. Over 61,400 square metres of industrial accommodation was leased or sold in Q2 2014 a level which was over 2.5 times greater than that signed in the three months previous. This brings the total level of industrial accommodation signed in Dublin in the first half of the year to over 85,000 square metres. Although this is considerably less than the almost 120,000 square metres signed in the first half of 2013, the agents say that there are a number of significant transactions in legals and due to sign before year-end which will boost take-up in the industrial sector later in the year.
According to CBRE, there were 23 individual industrial transactions signed in Dublin in Q2 2014, 17 of which were sales to owner occupiers. Indeed, just 7,100 square metres of the industrial accommodation signed in the quarter comprised letting transactions. Most of the focus of activity in the sector was on the Dublin South West (N7) corridor which accounted for 52% of all sales and lettings completed in Q2 2014, while a further 15% of the industrial accommodation transacted was situated along the Dublin South West (N81) corridor.
One of the most interesting trends noted in the quarter by the property agents, has been the increase in the demand for accommodation with demand for as much as 130,000 square metres of industrial accommodation at the mid-year point. This excludes occupier demand for sites to accommodate bespoke facilities a trend that the agents note, has emerged throughout the year, as large occupiers struggle to find suitable accommodation options to meet their needs.
On the back of this increase in demand and the tightening in the supply of prime facilities in the Dublin industrial sector, CBRE believes that prime industrial rents increased for the first time in six years to €62 per square metre in Q2 2014, while inducements also tightened from a standard 6 month rent free period on a 5 year lease to between 3 and 6 months duration.
Speaking on the launch of the Q2 2014 Dublin Industrial Marketview, Garrett McClean, Executive Director and Head of Industrial at CBRE Ireland commented, “Take-up in the first half of the year doesn’t give a true picture of the underlying level of activity in the industrial sector. We have witnessed a notable increase in demand over the last few months from occupiers and investors alike. The challenge is to find good quality buildings to satisfy this demand. However, even though there has been a tentative improvement in prime rental values in the most recent quarter, there is a long way to go until speculative development will be feasible Supply is therefore going to tighten further in the short to medium term until such time as rental values justify new development to occur”.
CONTACT: Marie Hunt – 00 353 (0)1 618 5543 / 00 353 87 2727115 or e-mail:firstname.lastname@example.org
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 (in terms of 2013 revenue). The Company has approximately 44,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through approximately 350 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. 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 130 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, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie./ni