The Industrial Market - CBRE
The Industrial Market - CBRE
May 2008
According to the latest report from CBRE, activity in the Dublin industrial market remains buoyant with approximately 60,000m2 of transactions concluded in the first quarter of 2008. Approximately 75% of the industrial transactions signed in Dublin during Q1 comprised lettings, which is unusual considering that industrial occupiers traditionally prefer to purchase their units. This is undoubtedly a direct result of the credit crisis with securing funding to purchase properties proving very difficult at present.
While deals are continuing to be signed in the industrial sector and prime rents are holding firm at approximately €130 per m2, it is clear that occupiers are taking advantage of slowing economic prospects and trying to secure more flexible deals in the current environment. Negotiations are considerably more protracted as a result. Over half of the transactions signed in the Dublin industrial market during the first three months of 2008 were located in the popular South West (N7) corridor.
Two of the most significant transactions concluded in recent weeks include the letting of 9,283m2 at Park West and the letting of 8,024m2 at Lucey Distribution Centre at Greenogue. There are a number of large industrial land requirements outstanding, primarily along the M1, N11 and M7 corridors and it is interesting to note that the value of prime industrial zoned and serviced land has remained stable in recent months despite the decline of up to 20% in land values that has been experienced elsewhere in the market. Average industrial land values in Dublin are stable at approximately €3 million per hectare although prices of more than twice this level are still being achieved along the South West (N7) corridor. While heretofore the only obvious sign of the credit crisis in this sector of the Irish property market has been more protracted negotiations, it is inevitable that as economic conditions worsen over the coming months, some industrial occupiers may start to put expansion and re-location decisions on hold.