Irish Industrial Market Q1 2013 Transaction activity The opening quarter of 2013 witnessed the strongest quarterly level of industrial transaction activity recorded since the third quarter of 2008. A total of 70,500 sq m was transacted during the three month period. The overall picture shows that while the industrial market continued to grow at a strong pace, performance within the market has been uneven. On one hand occupation levels continue to thrive however upward pressure on vacancy levels continues. The Dublin industrial market turned a corner during 2012 with a notable improvement in activity levels during the year. This pattern of activity continued in the opening quarter of 2013 with transaction activity rising significantly during the three month period. Aggregate take up stood at 70,500 sq m at the end of March, almost double the level of activity recorded during the previous quarter. For the first time since the downturn quarterly take up is in line with the ten year average.
Nagel both in Furry Business Park, Santry, Dublin 9. DB Schenker also agreed a letting of 3,500 sq m in Northern Cross Business Park. Quarter one saw a number of sales, albeit smaller in size, which included a unit measuring approximately 4,700 sq m at Bannow Road, Cabra and Unit 3 in the Northwest Business Park measuring just over 3,000 sq m. There were also a number of significant sales outside of Dublin including the sale of the former Image Shower unit in Purcells Inch Business Park in Kilkenny measuring approximately 6,700 sq m and the former Talk Talk call centre in units 1D, 2 and 3 at the IDA Industrial Park, Waterford. Figure 2
Dublin industrial take-up, sq m 250 000 200 000 150 000
Figure 1
100 000
Take up in the Irish industrial market, sq m 2 000 000
50 000 -
1 500 000
1 000 000 Source: DTZ Sherry FitzGerald Research
500 000 -
Cork
Galway
Limerick
Dublin
Source: DTZ Sherry FitzGerald Research
The opening quarter also saw a notable increase in the volume of deals transacted, rising by 25% when compared to the corresponding quarter in 2012. Furthermore, an analysis of the space transacted reveals uplift in demand for medium sized units. In particular, the average deal size stood at approximately 2,000 sq m in quarter one of 2013 compared to 1,100 sq m in the corresponding quarter in 2012. However, transaction activity during quarter one was boosted by a large short term letting of approximately 14,600 sq m to Ace Express at the former Amcor facility at Jamestown Road in Finglas. Other notable lettings during the quarter included the letting to Nightline of a facility measuring approximately 4,100 sq m and approximately 3,900 sq m to Kuehne &
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An analysis of the profile of tenants that occupied space during the opening three months of the year reveals that demand remains dominated by logistics companies; in particular, third-party logistics providers. A number of high profile 3PL companies such as Kuehne & Nagel, Nightline and Ace Express were active in the market during quarter one. Active demand during the opening quarter remained strong for modern accommodation; Grade A accommodation accounted for 23% of the total space transacted the three month period. Moreover, 70% of activity during the quarter comprised Grade B space. This trend is anticipated to continue into 2013 as almost half of the overall available stock comprises Grade B accommodation. The remaining space, 7%, comprised Grade C space. With 2013 under way, leasehold transactions continue to dominate activity; that said the appetite for freehold purchases as an occupational preference has steadily improved over the course of the last year. Leasehold transactions in quarter one of 2013 accounted for
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