“Robust demand” for space pushed the take-up rate in Dublin’s industrial and logistics property market to their second highest level for the first half of the year between January and June with construction activity reaching a record high.
In its latest report on the market, Savills Ireland said that 1.6 million sq ft of space was taken up in the first six months of the year, 620,000sq ft in the second quarter of the year. The latter figure was in line with the five-year average, the property adviser said.
There was also a further investor acquisition of 300,000sq ft in north Dublin, which it said was “indicative of strong market sentiment”.
The single biggest transaction between April and the end of June was packaging company WestRock’s 113,000sq ft design and build completion at Horizon Logistics Park adjacent to Dublin Airport. This was followed by pre-letting of 96,000sq ft by Mountpark at its Baldonnell development to electrical supplies distributor Rexel Group in May, the only pre-let recorded in the quarter, Savills said.
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[ Industrial and logistics property construction ramps up to meet demandOpens in new window ]
The third-largest deal was the former Cuisine de France building on Belgard Square North.
John Ring, director of research at Savills Ireland, said that while global conditions remain challenging, multinationals, particularly pharmaceutical companies, still have “significant” space requirements.
“Given the recent slowdown in manufacturing activities and pharma exports, GDP has been revised downwards across a range of forecasting bodies,” he said. “However, pharma exports are still high relative to pre-pandemic with exports values inflated significantly through the pandemic from vaccine production and increased medical production. While these global factors could impact the Irish market in the short to medium term it is not anticipated to cause major disruption.”
Construction activity in the industrial and logistics market, meanwhile, reached a record high of 1.2 million sq ft delivered in the second quarter.
The largest delivery was a 240,000sq ft site at Aerodrome Business Park, which is available to rent.
Savills said that some 79 per cent of anticipated delivery for the year has already been completed with just five units under construction and due to finish by year end.
Provisional vacancy figures, meanwhile, indicate a marginal increase from 1.3 per cent to 1.4 per cent quarter-on-quarter.
Jarlath Lynn, director of industrial and logistics at Savills Ireland, said that while vacancy rates had increased slightly, Ireland is in a relatively strong position in a global context. “Structural demand drivers such as population growth and ecommerce will continue to underpin future demand,” he said. “The market remains limited in terms of new supply with just 9% of Dublin’s industrial and logistics market built in the past two decades and only three of these buildings available for immediate occupation.”
