Dublin,
10
January
2019
|
00:01
Europe/Dublin

Strong Q4 Boosts Dublin Industrial Take-Up In 2018

January 10th, 2019 – Property consultants CBRE Ireland today released figures for the volume of industrial and logistics transactions signed in Dublin during 2018, which shows that 94,284m2 of take-up was recorded in the Dublin market during the fourth quarter of 2018, bringing total take-up in this sector in 2018 to 304,530m2. This volume of activity is up 22% on the previous year, boosted by a number of pre-letting transactions.

Garrett McClean, Executive Director, CBRE  Industrial & Logistics
2018 proved to be a good year for the industrial and logistics sector in the capital. We saw an escalation in planning activity and speculative development commencing along the M1 and N2 around Dublin Airport, as well as along the N3 and N7 corridors. Encouragingly, a number of these new speculative units have been let prior to practical completion, such is the pent-up demand for modern facilities in prime locations, which has boosted take-up volumes over the last 12 months.
Garrett McClean, Executive Director, CBRE Industrial & Logistics

Transactional activity in the industrial sector during Q4 2018 was primarily focused on the Dublin South West (N7) corridor, which accounted for 57% of all sales and lettings completed in the Dublin industrial & logistics sector in Q4 and 49% of all activity for the year as a whole. Meanwhile, 28% of industrial take-up in the fourth quarter occurred along the Dublin West (N4) corridor. A further 6% of the industrial accommodation that either let or sold in Dublin during Q4 was located along the Dublin North (M2) corridor. The average vacancy rate in 25 of the most modern industrial and logistics parks in Dublin was 8.04% at the end of Q4 2018, down from 8.23% last quarter. Eight of the 25 parks had no vacancy.

Prime industrial rents in the capital remained stable quarter-on-quarter, standing at €106 per square metre (€9.85 per sq. ft.) at the end of Q4 2018. Prime headline rents are expected to rise by a further 6.5% in 2019. In total, there was demand for 30,785m2 of industrial accommodation prevailing at the end of Q4 2018. Brexit-related demand is expected to increase in 2019 as companies attempt to streamline and adapt their supply chains, with some UK-based E-commerce occupiers expected to take a physical presence in Ireland for the first time this year. The evolution of E-commerce will be a substantial driver of demand within the logistics sector in 2019 with every percentage increase in online penetration fuelling additional demand for industrial & logistics stock to facilitate storage, distribution, final mile delivery and reverse logistics.

Appetite for good industrial investment opportunities remains strong, buoyed to some extent by further rental growth expectations in this sector. Although there has been an improvement quarter-on-quarter, of the more than €3.79 billion invested in Irish income-producing assets with a value of more than €1 million in Ireland during 2018, only 3% comprised industrial investments specifically. There were 15 industrial investments of more than €1 million completed in the Irish market during 2018. According to CBRE’s research, prime industrial yields in the capital sharpened further in the last three months of 2018, standing at 5.1% at the end of Q4 2018 and likely to trend stronger in 2019.

CBRE are due to release the 30th edition of their annual Outlook report next week, looking at prospects for all sectors of the Irish commercial property market in 2019.

About CBRE

CBRE Group, Inc. (NYSE:CBRE), 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 2017 revenue). The company has more than 80,000 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 150 employees, we work with occupiers, investors and developers of office, industrial and logistics, 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