The Irish industrial property market was back at
2007 levels in 2013 as take-up to the year end rose 18% from 2012, to 2.87m
sq.ft. This was comparable to levels achieved during the peak of the market in
2007, according to the Dublin office of Jones Lang LaSalle, the international
property agents. Meanwhile CoStar News, the commercial property news website, broke the news
Blackstone, the US private equity firm, and Google, the internet giant, have split the spoils of NAMA’s four-strong Dublin office
Platinum portfolio for a combined sale price of €165m.
Jones Lang LaSalle says in its Q4 2013
Pulse report [pdf] that take-up in the quarter was boosted by 6
large deals greater than 50,000 sq.ft. but the market remains driven by smaller
deals, with 62% of take-up for space less than 10,000 sq.ft.
Dwyer, head of research said that “The
biggest issue for the market at the moment remains the lack of availability of
prime product. Although vacancy across the whole of Dublin is high, the
availability of prime space in key geographies is decreasing with strong levels
of take-up and no new construction starts. Occupiers therefore continue to be
faced with decreasing choice in certain locations for certain size categories.
As a result, some occupiers continue to be forced to consider alternative
locations and in some cases, lower quality, secondary space”.
2014 is expected to be another steady year for the industrial sector, with
continued strong levels of occupier activity likely. With no new construction
starts currently underway and continued strong demand, supply issues for prime
space are likely to continue. Initially, this may cause some rental increases,
and in the medium term, it may lead to construction and the delivery of new
space. There is already evidence of planning applications being submitted, so we
may see construction start in the sector in the next 12-18 months.
director of industrial agency said that: “2014 is
likely to show a true turn of market conditions, particularly for prime product.
Occupiers may well be faced with competitive bidding situations driving
increases in values not witnessed for several years”.
Blackstone and Google
says that Blackstone and Google fended off second round offers from Hibernia REIT and
Irish Life to split the 321,161 sq ft Dublin office portfolio between them.
Earlier in the process Delancey was also briefly interested.
CoStar News understands that Blackstone has paid around €100m for the 82,423 sq
ft Hume House on Pembroke Road; the 83,687 sq ft Bloodstone Building on Sir John
Rogerson’s Quay; and Riverside IV’s Block B on Britain Quay. The three office
blocks have a combined annual rent roll of €4.56m and were put on teh market
after the bankruptcy of Seán Dunne, the former developer.
Google has completed the purchase of the 96,383 sq ft Grand Mill Quay on Barrow
Street, which it partly occupies, for around €65m. Google occupies 21.3% of the
total space in the two interconnecting blocks and its European headquarters is
the adjacent, Gordon House. It paid a combined €211m for these units.
The combined €165m price reflects a 37.5% premium on the original €120m asking
price when the portfolio came to market late last year.
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