After a strong Q1, 438,000 sq ft of industrial and logistics space transacted in Q2 2022, well below the five-year quarterly average of 714,000 sq ft. However, according to Savills, this likely reflects the timing of deals, with Q1 being 33% higher than the five-year average.

Q2 Deals

An above-average number of larger than 50,000 sq ft signed in Q2, although take-up was held back by an absence of deals over 100,000 sq ft. There has been a substantial decline in small deals between 5,000 and 10,000 sq ft, with just one unit of this size signing in the quarter, the lowest level since the GFC (global financial crisis) and reflective of the tight supply in this range. With big boxes continuing to trade, and a sharp falloff in the number of small deals, the quarterly average deal size was 33,700 sq ft – 7% higher than the five-year quarterly average of 31,600 sq ft.

Dunnes Stores – Largest Deal of the Q2

An expansion by Dunnes Stores – who leased 78,400 sq ft of space in Stadium Business Park – was the largest deal of the quarter. The second-largest deal of the year was a pre-let by third-party logistics (3PL) provider GLS from developer Henderson Park. This design and build unit will provide the firm with a bespoke unit to service their growing logistics needs. Indeed, we are aware of at least one other international 3PL firm that has a similar requirement in the market.

The third-largest deal was the forward sale of the 70,000 sq ft Contrail House unit in Dublin Airport Logistics Park for €17 million to Yourway. This unit will serve as a European flagship depot for the US specialist pharmaceutical and clinical packing specialist, with the firm’s founder noting Ireland’s strong biopharma sector as a key reason for the firm’s expansion in the market. In a similar vein, Clinigen - a pharmaceutical firm - expanded its presence in Ireland, leasing an additional 46,000 sq ft of space in Unit 12, Airways Industrial Estate in the fifth-largest deal of the quarter. The unit has undergone recent renovations and its adjacency to Dublin Airport was a key factor in attracting Clinigen.

John Ring, Director of Research, commented:

“While we have seen increasing macro-economic risks in the second quarter of the year, it is clear that Ireland’s strong demographics and biopharma sector are continuing to drive demand. These deals highlight the synergies of a buoyant export market and expanding logistics sector. While the value of Ireland’s medicinal and pharmaceutical products only increased by 1% in 2021, exports of these products are 26% higher than they were prior to the pandemic. Indeed, while global growth is set to slow partly due to interruption in international trade in 2022, Irish exports are forecast to grow by 8.5% in 2022 and 6.2% according to the ESRI Summer forecasts.”

Jarlath Lynn, Director of Industrial and Logistics, commented:

“We continue to see a healthy level of enquiries and demand occupiers, particularly for more efficient modern units that are now coming to the market. Of the 459,000 sq ft of stock that was completed in Q2, just one unit of 50,000 sq ft was vacant upon completion. As the energy crisis has intensified, modern units built to a quality significantly higher than anything was seen in the last cycle can provide occupiers with operational efficiencies and savings.”