There has been a dramatic increase in transactions in the industrial market over the past year, according to Savills. “Gross transactions in the industrial market topped 141,000sq m in the third quarter of 2015,” it says, “bringing total take-up for the first nine months of the year to over 360,000sq m. This is almost double the equivalent level in 2014.”

Some 67 per cent of the take-up in the third quarter was acquired through outright purchases, as sales have now outstripped lettings for seven consecutive quarters in the sector.

“This reflects the fact that, despite a pick-up of 17 per cent in capital values since their low point in Q3 2013, industrial units can still be acquired at a significant discount to reinstatement costs,” Savills adds.

It says southwest Dublin leads the way, accounting for 52 per cent of transacted space in the quarter, while 22 per cent and 23 per cent of total activity took place in the northeast and northwest of the city.

As sales of industrial units have risen, it is no surprise to learn that prime yields in the sector have narrowed sharply over the past 12 months. Rising prices have driven yields down from 10 per cent to 7.7 per cent since September 2015 as outright sales have outstripped lettings by a ratio of three to one, notes Savills.

John McCartney, director of research at Savills, says that initial yields in the industrial market have been squeezed down by 240 basis points over the last year, compared with yield compression of about 130 basis points for commercial property generally.

“Over the last three years, we have seen buyers who purchased commercial real estate assets at below replacement cost being well rewarded for their prescience,” he says. “Industrial values fell further than those of other commercial assets during the downturn and this has created opportunities for value-focused buyers. With prices still below reinstatement cost in many locations, the window of opportunity remains open and industrial property continues to be one of our key picks for 2016.”

Occupier demand, based on strong economic growth, is driving investor interest in the industrial market.

Gavin Butler, director of industrial at Savills, says prime capital and rental values in the industrial sector have increased between 10-15 per cent so far in 2015.

“With vacancy levels tightening due to strong demand and no new supply coming to the market,” he adds, “we expect prices and rents to increase further in 2016 as competition among occupiers intensifies for the limited supply of prime space. As the gap between values and replacement costs narrows, we will see speculative development in 2016 for the first time in nine years.”