Surge in industrial take-up

Take-up of space at the mid-year point in the industrial market is over twice that of 2014, according to fresh research from agent Savills.

It reports that over 220,000sq m (2.368 millionsq ft) of space was taken up in the first six months of the year.

Strong demand for space has pushed up prime industrial rents by about 6 per cent so far in 2015. “Although rents are rising, the demand to buy industrial properties has led to even faster growth in prices. As such, industrial yields have been driven down by almost 320 basis points in the last 12 months – much more quickly than those on other types of commercial real estate,” according to Savills.

Dr John McCartney, director of research at Savills, says the rebound in Ireland’s consumer economy is generating strong demand for logistics and distribution space.

“With the economy expected to continue performing well and with no industrial units currently being built, this has led rental growth which is now attracting owner-occupiers and investors,” he says.

Gavin Butler, director of industrial property at Savills, says that, with capital values rising, new development is within sight of becoming viable once again. "We are likely to see new industrial building start to emerge next year for the first time in almost a decade," he says. "However, any such development is likely to be designed and built to occupiers' requirements, either on a pre-sale or pre-let basis."