Commercial property specialists CBRE Ireland today released figures for the volume of industrial sales and leasing activity completed in Dublin in the third quarter of the year. According to CBRE, the Dublin industrial & logistics sector of the property market continued to perform well during the third quarter of 2021 with take-up reaching a healthy 70,678m2 in 39 individual transactions during the three-month period. This brings total take-up in the Dublin market in the first nine months of 2021 to 182,877m2. Activity in the sector has been boosted by an increase in Ecommerce activity in the last 18 months although demand has also increased as a result of Brexit and changes to supply chain and distribution as an increasing number of companies bring their distribution in-country.
In addition to increased demand from occupiers for premises throughout Ireland, CBRE report a very notable increase in investor activity in this sector of the market, mirroring trends being experienced throughout Europe. Indeed, more than €442 million has been invested in industrial investment properties in Ireland during the first nine months of 2021, which is considerably higher than annual investment figures in recent years. In the year-to-date, the industrial sector has accounted for approximately 13% of overall property investment in the state and this is set to increase further before year-end with several industrial transactions due to complete in Q4.
According to Marie Hunt, Head of Research at CBRE Ireland, “The industrial & logistics sector of the property market has actually benefitted as a direct result of the pandemic and Brexit related issues. Although largely occurring in off-market processes, transactional activity in the industrial and logistics sector has been buoyant throughout the first nine months of the year, with activity comprising a combination of large pre-lettings of new buildings as well as sales and lettings of existing facilities. The expectation is that this strong momentum will continue into Q4 with several large off-market transactions due to complete and feed into take-up numbers before year end. Despite the volume of activity recorded in the first nine months of the year, demand for industrial accommodation has almost doubled quarter-on-quarter, which suggests continued momentum in this sector for the foreseeable future”.
According to Shane O’Connor, Surveyor in the Industrial & Logistics team at CBRE, “A shortage of modern accommodation continues to be a significant frustration for industrial occupiers in the Dublin market with most new buildings being pre-let prior to practical completion. It is therefore encouraging to see developers reacting to the shortage of standing stock and lodging planning applications for new schemes and additional phases of existing schemes”.
Prime industrial rents for new buildings in the capital remained stable at €113 per square metre (€10.50 per sq. ft.) at the end of the third quarter of 2021 but are expected to rise to €116.80 per square metre (€10.85 per sq. ft.) due to the weight of demand targetting limited opportunities. Prime industrial yields, meanwhile are currently on par with prime offices at 4% according to CBRE.