Take-up of industrial and distribution facilities in Dublin falls 30%

Take-up of industrial and distribution facilities in Dublin fell by almost 30 per cent in the second quarter compared with the previous three months, data from property group CBRE Ireland shows.

A report from the group shows some 60,652sq m of space was taken up by companies, which was down from 85,481sq m in what was described by CBRE as a “strong opening quarter”.

Total take-up for the first six months of the year now stands at 146,133sq m, which is almost exactly in line with the level of take-up recorded at the same point in 2022, which turned out to be the second strongest year on record for the market.

The CBRE data also shows prime Dublin industrial rents rose by over 4 per cent for the second successive quarter, now standing at €134.55 per square metre. Rents in the capital have now risen 11 per cent over the last 12 months, with further inflation anticipated.

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CBRE Ireland head of research Colin Richardson said the volume of take-up in the Dublin market “remains solid” despite the softer economic backdrop, while the size and value of some of the deals completing in the market remains “particularly encouraging”.

“Large, global logistics occupiers across a range of sectors agreed long-term deals for new warehousing and distribution space in Dublin in the last three months, making high-value commitments to Ireland in the process,” he added.

Garrett McClean, head of the industrial and logistics team at CBRE Ireland, said: “We continue to record strong occupier demand from both international retailers and third-party logistics providers seeking to expand their distribution footprint in Dublin.

“Not surprisingly, with a low vacancy rate of only 1.4 per cent, new development continues with a number of schemes due to be launched within the coming weeks.”

CBRE said it was “particularly encouraging” to see several large-scale, global businesses make high-value, long-term commitments to Ireland during the quarter.

American corrugated packaging firm WestRock, which has a market capitalisation of $7.6 billion (€6.8 billion), signed the largest deal in the quarter.

It will vacate several older units around Dublin and consolidate into a new, purpose-built, distribution and warehousing headquarters at Horizon Logistics Park (10,510sq m), which will reach completion in 2025. The lease term is 20 years.

The second largest deal saw French electrical distributor Rexel Group, which has a market capitalisation of €7 billion, agree to pre-let Unit G at Mountpark Baldonnell (9,005sq m), which will be its new national distribution centre in Ireland.

Danish transport and logistics conglomerate DSV and major Danish shipping company DFDS were also active in the largest deals in the quarter.