A large number of “big-box deals” in Dublin’s industrial and logistics property sectors pushed the average size of transactions well above the five-year average in the third quarter, Savills Ireland has said.
Take-up within the two subsectors reached 1.3 million sq ft in the third quarter, a new report from the estate agent has shown, more than double the figure achieved in the same period in 2021.
Irish property group Iput Real Estate’s pre-letting of more than 380,000 sq ft to two global logistics businesses at Quantum Logistics Park near Dublin Airport represented the biggest deals in the capital between July and September.
Iput signed a deal in September with Maersk for a total of 252,000 sq ft of space at the development – which incorporates Ireland’s first net-zero carbon logistics building – in Kilshane Cross, close to Dublin Airport, the Dublin Port Tunnel, Dublin city centre and the M50.
“The large average deal size of 54,000 sq ft drove take-up, more than double the third quarter five-year average of 26,000 sq ft. This is linked to a large number of big-box deals, with deals greater than 50,000 sq ft accounting for 79 per cent of take-up,” Savills said.
Meanwhile, the vacancy rate in the capital’s logistics and industrial subsectors increased from 1 per cent to 1.4 per cent by the end of September. But Savills said just six of the 37 vacant units were built after the year 2000, indicating market demand for newer, better quality units, “explaining why vacancy has risen despite ample market demand”.
Jarlath Lynn, director of industrial and logistics at Savills Ireland, said activity “continues to be strong” despite concerns about inflation and weakening consumer demand.
“The market is set to end the year positively with 1.7 million sq ft of stock currently reserved, with the current demand-supply unlikely to ease given the undersupply of these larger, high-quality, modern units,” he said. “This is reflected in our view that prime rents will continue in an upward trajectory.”
Mr Lynn said that rising energy costs this winter are likely to lead to increased demand for units already under construction and that are of “high energy-efficient quality”.
