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559,731 sq.ft. transacted
Industrial take-up for Q1 2013 performed strongly, with 559,731 sq.ft. transacted. This is double the level of take-up than the same quarter last year (281,357 sq.ft.) and is comparable to last quarter (581,248 sq.ft.). With strong activity in the last 2 quarters of 2012, the momentum in lettings and sales levels has continued into the first quarter of the year.
Take-up in the quarter was boosted by 2 large lettings greater than 70,000 sq.ft. however, the majority of take-up (58%) was for space less than 10,000 sq.ft. The largest deal of the quarter was Amcor Facility, Jamestown Road (75,000 sq.ft.) which JLL acquired on behalf of a client.
Hannah Dwyer, Head of Research said that ‘it is positive to see the strong levels of industrial take-up continue into 2013, particularly given the slow start at the beginning of last year. With 31 deals comprising 20 lettings and 11 sales, total take-up of 559,731 sq.ft. is sustainable for a market of Dublin’s size, and shows continued signs of stabilisation’. Hannah also added that ‘with strong take-up in the last 4 quarters, take-up in Q2 should remain at healthy levels close to 500,000 sq.ft., and total take-up for 2013 is expected to hit levels similar to the 2m sq.ft. recorded at the end of 2012’.
There were a number of trends emerging this quarter, including an increase in the level of tertiary deals (30% of take-up). There is evidence of some occupiers showing preference for lower quality stock driven by the opportunity to pay low rents and values, but take-up (42%) is still dominated by prime stock.
Nigel Healy, Director of Industrial Agency said that: ‘although there was an increase in the number of tertiary deals, this was due to a reclassification of stock to match evolving technologies and occupier demand for more modern premises. Some occupiers are looking to avail of the lowest rents possible which did cause some uplift in tertiary activity this quarter. These deals tend to be smaller-sized sole traders, and larger corporate occupiers continue to focus on prime quality product. Requirements for modern space with new technologies is likely to continue and therefore older stock will struggle’.
Over the next 12 months, it is likely that the industrial market will continue to show signs of recovery, albeit at a steady pace. Rents continue to stabilise across the sector, and although there is no real sign of rental growth, rents remain unchanged for the last 6 quarters which does show some signs of stability.
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