The industrial property market finished the year strongly with an uplift in take-up levels in the final quarter pushing total take-up for 2013 to 2.87m sq.ft., close to activity levels during the peak pre-2009 era.
It signals a recovery in the market in terms of demand and occupier activity, according to Jones Lang LaSalle.
Take-up this quarter was boosted by 6 large deals greater than 50,000 sq.ft. but the market remains driven by smaller deals, with 62pc of take-up for space less than 10,000 sq.ft.
Hannah Dwyer, Head of Research said that “The biggest issue for the market at the moment remains the lack of availability of prime product. Although vacancy across the whole of Dublin is high, the availability of prime space in key geographies is decreasing with strong levels of take-up and no new construction starts. Occupiers therefore continue to be faced with decreasing choice in certain locations for certain size categories. As a result, some occupiers continue to be forced to consider alternative locations and in some cases, lower quality, secondary space”.
2014 is expected to be another steady year for the industrial sector, with continued strong levels of occupier activity likely. With no new construction starts currently underway and continued strong demand, supply issues for prime space are likely to continue. Initially, this may cause some rental increases, and in the medium term, it may lead to construction and the delivery of new space. There is already evidence of planning applications being submitted, so we may see construction start in the sector in the next 12-18 months.
Nigel Healy, Director of Industrial Agency said that: “2014 is likely to show a true turn of market conditions, particularly for prime product. Occupiers may well be faced with competitive bidding situations driving increases in values not witnessed for several years”.