Dublin market dynamic as Ireland benefits from Brexit
Dublin’s property market is “quite dynamic at the moment” according to IPUT chief executive Niall Gaffney. With a positive macroeconomic background, practically full employment, the youngest population in Europe – which is also growing – the city’s prospects are positive while the backdrop in Europe is challenging.
However, “it’s quite nuanced,” as Gaffney explains. The fintech sector has scaled back so there is a spike as the likes of Meta have put space back into the market. “That’s distorted the vacancy rate,” Gaffney said.
The headline vacancy rate is currently trending towards 15% in the central business district. “However, if you break that back to the prime CBD ESG grade stock, it’s actually much lower than that at 5% or 6% and that’s where IPUT in particular have our Holdings
Gaffney said that there will be a spike in the headline vacancy of prime office stock in Dublin’s office market over the next 24 months but there is a lack of speculative development in the current cycle. “We anticipate that by 2026 there’ll be an actual shortage of grade-A office space in the prime CBD areas, which will lead to some rental growth opportunities.”
Dublin’s logistics market has been the primary beneficiary of Brexit, Gaffney said. The change in the UK’s tax status meant that on-shoring into Ireland occurred at an exponential rate. “Dublin in particular has been the main beneficiary of that, so you have product arriving directly from Europe from North America, from Scandinavia, directly into Ireland and that has hastened a demand for large scale distribution centres, which haven’t traditionally been built in our market.”
Consequently, the vacancy rate for prime, large-scale logistics buildings is in single figures, he explained.
“It’s given us quite an interesting opportunity to develop logistics ourselves. Our current pipeline includes over 200 acres of land zoned for Logistics. We just completed a logistics park of about 550,000 sq ft and we pre-let the entire park of four units prior to completion at the end of last year.”
IPUT also built its first net zero, timber frame warehouse and let that to Maersk. “Occupiers of the calibre of Maersk, Amazon and DHL are expanding rapidly in the Dublin logistics market, so it’s quite an interesting space to be in, and we can see that continuing for at least another five years.”
