Demand for short-term logistics spikes in Dublin

Dublin’s industrial and logistics market has posted an uplift in short-term requirements for logistics and cold storage space, created by heightened demand for essential goods during the coronavirus pandemic. At the end of Q1 there was demand for 1.5m sq ft of shed space, up roughly 7% from around 1.4m sq ft in the previous quarter, according to the latest research from CBRE Ireland. Within the data centre sector, internet and remote working providers have also seen a spike in activity. Colin Richardson, senior analyst at CBRE, said this will in turn increase demand for cloud-based services. The agent reiterated that like other sectors, transactional activity stayed relatively healthy for Q1; any deterioration in activity will become more evident in Q2. Take-up during Q1 Total take-up in Dublin for Q1 was down 9% on the same quarter last year, standing at 932,700 sq ft. However, CBRE said it was 17% higher than the five-year average for Q1. Transactional activity in the industrial & logistics sector during Q1 2020 was mainly focused on the Dublin North West (N3) and Dublin South West (N7) corridors, which respectively accounted for 42% and 41% of sales and lettings completed in Dublin during the quarter. Meanwhile, 8% of industrial take-up in the first quarter occurred along the Dublin North East (M1) corridor, while 7% of Q1 take-up was along the Dublin North (M2) corridor. In total, there were 36 individual industrial transactions signed in Dublin in Q1 2020. Of these, 89% of total deal volume recorded in Q1 comprised 24 letting deals, with the remaining 12 (11%) being sales. Prime industrial rents in the capital remained steady quarter-on-quarter, standing at €10.25 (£8.86) per sq ft at the end of Q1 2020. Prime yields remained steady at 5%, having compressed by 10 basis points compared with the previous quarter. During Q1, 57% of transactional activity in Dublin industrial and logistics concerned buildings extending to more than 100,000 sq ft. Deals on hold CBRE said that while many transactions are proceeding in the sector, it predicts some industrial & logistics requirements and a few of the larger land transactions will be put on hold in the short-term. Completion dates for new projects are also expected to be pushed back by at least three months, as sites temporarily close. To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette