According to property consultants Savills Ireland, gross industrial take-up exceeded 119,000 sq.m. in the first half of the year.
According to property consultants Savills Ireland, gross industrial take-up exceeded 119,000 sq.m. in the first half of the year. Despite coming up short on H1 2015, when a residual of deals linked to the run-out of the CGT incentive inflated both occupational and investor activity, this represented a 23% increase on the same period in 2014. Savills notes that the ongoing improvement in the consumer economy is increasing the flow of goods passing through it, driving the demand for industrial space in the process.
Economist at Savills Ireland Sean O’Malley commented;
“The addition of 47,000 new jobs in the last twelve months has resulted in household disposable incomes rising by 6.2% – or around €1.5bn. The majority of this uplift is being spent which, when coupled with a rebound in consumer credit, has propelled personal consumption growth to 5% in Q1 – the fastest pace of growth in over eight years. Consequently, an increasing throughput of consumer goods in the Irish economy is clearly having knock-on implications for logistics and warehousing demand”.
Although the economy in expected to go through a period of greater uncertainty following the UK’s decision to leave the EU, occupier demand for industrial and warehousing units is likely to remain robust. According to Gavin Butler, Director of Industrial at Savills Ireland, the broadly based improvement in the domestic economy has been key in underpinning the demand for space;
“While Brexit could see expansion plans for firms heavily exposed to the UK market being put on hold, the fact that the Irish economy is expected to grow at a robust pace in the medium term should result in continued demand for industrial space from those servicing the domestic market. This will likely lead to further upward pressure on prime rents and values until such time that new product reaches the market”.