While industry focus in recent months has been centred around the office and retail sectors it is now time for industrial property to rise from the ashes.
New research has shown a mammoth take up of industrial space in 2015 - almost three times that of 2011. The demand has been driven by the increase of multi-nationals in the Irish market, particularly those linked to online retail distribution, food sectors, pharmaceuticals and data centres.
For the first time in over ten years there is now a shortage of high quality modern warehouses and logistics property. So what does this mean the Irish market? We are likely to see further demand for well-located space and subsequently a stark increase in rental growth and capital value.
This demand may perhaps even lead to a moderate requirement for development in the sector. This asks the question as to whether there developers out there in the market in a position to take on this kind of work? The industrial market is generally known for its ability to respond quickly to demand cycles due to the relatively short construction period for industrial buildings and we expect to see an increase in planning applications for industrial schemes throughout 2016. Although planning may be obtained we are unlikely to see construction commencing until such time as rents rise to a level where development is viable and funding is available.
This is definitely an area to watch for 2016!
Industrial commercial property space take-up surges