Disruption and delays brought about by the end to the Brexit transition period at the start of the year has contributed to a boost in demand for industrial and logistics property, according to property consultants CBRE in its latest report on the commercial property market.
The report describes the market as ‘calm with a palpable sense of expectation’ as investors and businesses await an easing of Covid restrictions.
Property agents say that the resurgence in activity that was expected in many sectors of the market in 2021 has clearly now been delayed.
The one bright spot in the market at the moment is the industrial and logistics sector.
Changes to the trading regime with Britain, as well as transport across the UK landbridge to the continent, has prompted businesses to review their supply chains and consider establishing or increasing existing in-country storage and distribution.
“This has put additional pressure on a market that is essentially starved of modern supply, leading to an increase in pre-letting of new accommodation that is at various stages of the planning or construction process,” Marie Hunt, Head of Research at CBRE Ireland said.
“In addition to overseas retailers looking to locate more of their storage and distribution in-country, as more UK retailers opt to close physical stores in the Irish market, CBRE expect to see some of these entities leasing logistics units to facilitate online delivery in Ireland,” she added.
Bloomberg recently reported that online retailer Amazon was on course to take a 650,000 sq ft (square foot) unit in Baldonnell, County Dublin.
It’s expected that the Baldonnell facility would be Amazon’s first order fulfilment centre here where products are picked and packaged by Amazon staff.
“CBRE expect that this will lead to some competing firms setting up Ecommerce operations here later this year,” Ms Hunt said.
Prime headline rents in the Dublin industrial market remain stable at €113 per square metre or €10.50 per square foot, according to the report.
There is said to be a particular shortage of buildings extending to up to 3,000 square metres.
“In addition to pent-up occupier demand, investor demand for industrial and logistics assets in the Irish market is also very strong at present with a number of transactions imminent,” the report says.