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69,932 m² of take-up was recorded in the Dublin industrial market during Q2 2017

69,932 m² of take-up was recorded in the Dublin industrial market during the second quarter of 2017, bringing total take-up in this sector in the first half of 2017 to 120,651 m². This is almost exactly on par with the volume of activity achieved in the first half of 2016 although take-up in the second quarter of 2017 specifically was up 27% on the volume of take-up achieved in same quarter last year. There were 45 individual industrial transactions signed in Dublin in Q2 2017, bringing the total number of transactions in this sector in H1 2017 to 83. This is compared to 96 transactions signed in the same period last year.
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45% of the total volume of industrial take-up recorded in Dublin in Q2 2017 comprised lettings with 29 of the 45 transactions signed in the period comprising lettings. In the first half of the year, 54% of transactions comprised lettings.

Prime rents rose 6% in the first half of 2017 and now stand at €99.50 per square metre (€9.25 per sq. ft.) at the mid-year point. Prime rental values are now close to levels that justify new development and on that basis, we expect to see an increase in speculative development activity in this sector of the market in the second half of the year particularly now that it appears that Brexit may result in heightened demand for industrial and logistics accommodation in the capital in due course.

Transactional activity in the industrial sector during Q2 2017 was primarily focused on the Dublin South West (N81) corridor, which accounted for 35% of all sales and lettings completed in Dublin in the three-month period. A further 18% of the industrial accommodation that either let or sold in Dublin during Q2 was located along the Dublin North East (M1) corridor while 12% of industrial take-up in Dublin in Q2 occurred along the North (M2) corridor and Dublin South West (N7) corridors respectively.

16% of Q2 take-up in the Dublin industrial market extended to more than 9,290 m² (100,000 sq. ft.) in size with a number of large sales boosting activity. 29% of activity comprised transactions of between 4,656 m² and 9,290 m². Meanwhile, 28% of industrial take-up in the capital in Q2 comprised transactions of between 1,858 m² and 4,645 m² (20,000 – 50,000 sq. ft.) in size. The overall volume of demand in this sector fell slightly quarter-on-quarter. There was more than 65,000 m² of demand for industrial accommodation prevailing at the end of Q2 2017 of which 36% was focussed on the Dublin South West (N7) corridor in particular. Interestingly, a further 35% of demand at the end of Q2 was focussed on any Dublin location.

Appetite for good industrial investment opportunities remains strong, buoyed to some extent by rental growth expectations in this sector. However, supply remains constrained, particularly for larger lot sizes. Of the €775 million invested in Irish income-producing assets with a value of more than €1 million in Ireland in the first six months of 2017, 8% comprised industrial investments specifically while industrial investments accounted for 6% of investment spend in Q2.

According to our research, prime industrial yields in the capital are stable at approximately 5.50% at the end of Q2 2017 and are expected to remain stable for the foreseeable future.

Major Industrial Transactions Q2 2017
Property District Size m² Type
Belgard Square, Belgard Road, Dublin 24 Dublin South West (N81) 11,362 Sale
Belgard House, Belgard Road, Dublin 24 Dublin South West (N81) 9,183 Sale
Kingfisher House, Dublin Airport Logistics Park, Finglas, Dublin 11 Dublin North (M2) 6, 100 Letting
Unit D2, Airport Bus Park, Old Airport Road, Cloghran, North Co Dublin Dublin North East (M1) 4,784 Letting
Part 1, Former Johnson Brothers Facility, Ballymount Avenue, Dublin 12 Dublin South West (N7) 4,498 Letting