Industrial market rebounds

There was notable rebound in the industrial market last year, according to a review of the sector by DTZ Sherry FitzGerald.

It reports that aggregate transaction activity in the Irish industrial market reached 357,700sq m (3.85 million sq ft) in 2013, up from 262,900sq m (3.153 million sq ft) recorded in 2012.

“The rebound in activity was supported by strong performance in the Dublin industrial market,” according to DTZ. Activity levels in Dublin increased quarter-on-quarter in 2013 and the year closed with the strongest quarterly level of activity recorded since the peak of the market in 2007.

Transactions in the capital reached almost 300,000sq m (3.229 million sq ft) during 2013 and this “compares favourably to the long run average”, according to DTZ, while the number of transactions was up 47 per cent on 2012.

The largest transaction during the final quarter of 2013 was the sale of an industrial unit on the Malahide Road, Coolock, Dublin 17 measuring 8,500sq m (91,493sq ft). Other sizeable deals included the sale of unit 1 & 2 at the John F Kennedy Park, Naas Road, Dublin 12, measuring 6,300sq m (67,813sq ft).

"The strong industrial performance experienced during the year in Dublin fuelled a resumption of rental growth of approximately 18 per cent over the 12-month period," said Marian Finnegan, chief economist, Sherry FitzGerald Group.

However, Finnegan noted that despite “extremely robust” demand for industrial space, the level of net take-up in Dublin was negative for the year as a whole.

Irish industrial markets continue to display a wide range of vacancy ratios, from 12 per cent in Galway to 27 per cent in Dublin, according to the report. The Galway industrial market, for example, experienced strong annual take-up levels in 2013 with a total of 9,500sq m of space transacted in 2013 – 49 per cent higher than 2012.

Meanwhile, market activity in Cork fluctuated in 2013. After strong activity in the opening half of the year, take-up reduced in Q3 but rebounded in Q4 giving a robust annual take-up of 22,300sq m. Activity was focused on smaller deals as just 7 per cent of all occupations in the year comprised deals measuring over 1,000sq m.

Supply levels remain elevated across all the regional centres, primarily as a result of the ongoing release of second-hand space back to the market.