Take-up for Q4 totalled 887,417 sq ft across 45 deals. This is more than twice the take up for last quarter and pushes year end volumes for 2017 2.5 million sq ft which is comparable to levels achieved in 2016.
The main cause for the increase in take-up compared to last quarter is the increase in the number of larger-sized deals. There were 4 deals greater than 50,000 sq ft compared to 1 last quarter. The average deal size increased significantly from 12,362 sq ft in Q3 2017 to 19,720 sq ft this quarter. That said, take-up continued to be dominated by smaller-sized deals, with 54% of deals under 10,000 sq ft this quarter.
Hannah Dwyer, Divisional Director and Head of Research said that, “The industrial market has performed strongly in the final quarter of 2017 with strong take-up levels helping to boost year-end volumes to comparable levels achieved in 2016. Looking forward to 2018, we are expecting the sector to continue to show stability and recovery. Demand is likely to continue to come from a number of sectors, but in particular, we are expecting greatest activity from international 3PL, food and beverage, pharma / medical, tech and distribution companies. These occupiers are likely to be focused on larger-sized spaces in new and modern facilities which will help to drive total take-up volumes for the year-end.”
As reported last quarter, the greatest issue for the sector continues to be supply, with limited existing quality stock available across all locations. Supply is therefore expected to remain tight throughout 2018. With 3 schemes currently under construction and a further 3 due to go on-site, there will be a slight increase in new supply coming on to the market.
Prime rents have remained steady this quarter, and they are likely to rise in 2018, fuelled by the imbalance in demand/supply fundamentals. Over 2017, headline rents reached €9.25 per sq ft in a select number of cases but this was limited to specific schemes and requirements.