Outlook

25 LISNEY | REVIEW 2015 & OUTLOOK 2016 INDUSTRIAL
BELOW LEFT:
Symantic
Acquired an 11,200 sqm building plus two
sites totalling 6 acres in Orion Business
Campus, Blanchardstown
BELOW RIGHT:
X2 Heathrow
The UK’s first multi-storey industrial building
IN FOCUS:
URBAN
LOGISTICS
INDUSTRIAL
LAND
Following on from a pick-up in activity
in 2013 and 2014, demand for industrial
zoned land continued in 2015 with a
number of deals concluding. Early in
the year, lands at the Cherryhound
interchange on the M2 motorway
(60 acres of part industrial / part
agricultural lands) were purchased by
Fingal County Council in a best bids
process. Nearby, NAMA sold 74.9 acres
of logistics park lands known as Airlink
for approximately ¤200,000 per acre.
In Q3, the M1 Business Park in
Balbriggan was put up for sale. On
offer were 157 acres of undeveloped
land plus the freehold interest
in 22.6 acres of developed lands
with a guide price of ¤6.15m.
In the greater Dublin area, two notable
industrial parks were sold in Co Kildare.
There was a formal tender process for
a substantial part of Tougher Business
Park, which comprised 84 separate
building assets plus undeveloped
land and it achieved in excess of
¤16m. Additionally, Millennium Park,
which comprised a mix of office
and industrial land was acquired by
Tetrarch Capital for a reported ¤36m.
In many large cities internationally, there
has been an emerging trend whereby
retailers are taking small warehouse
facilities close to key urban centres. These
‘urban logistics’ premises allow ‘sameday’
or even ‘within-the-hour’ delivery of
products purchased by their customers
online. Having mega sheds on motorway
junctions well outside of the centre would
not allow for this as the products need to
be as close as possible to where people
live and work. Proximity is also necessary
for items returned by customers, which is
becoming increasingly important.
The demand for land for housing and
higher-order commercial uses has
traditionally pushed industrial uses to the
periphery. However, the need for ‘urban
logistics’ has led to the emergence of
multi-storey warehousing. Such buildings
are common in Hong Kong, China, Japan
and Singapore, but Segro’s X2 at Heathrow
Airport was the first of its kind in the UK.
This building comprises eight individual
industrial units, four on each of the two
levels, plus ancillary office accommodation.
Full lorry access and loading is available
on both levels with the upper level
accessed via concrete ramps. The X2 was
just 50% more expensive to build than
a conventional warehouse. Normally, a
premises of its size (approximately 22,300
sqm) would require a site of about 12.4
acres and would have a site coverage
of 45%. But the site used for X2 was
approximately 6.4 acres, almost half the
size, and the site coverage was 86%.
While it may be a number of years out
before developers and owner-occupiers
consider multi-story industrial facilities
in Dublin, it may enter the market in the
future as the industrial sector competes
with other uses for limited central space.
Retailers will continue to represent a
growing proportion of industrial market
activity due to growing online sales, and
added to their need for ‘urban logistics’
premises to supply these consumers, multistorey
industrial properties may need to
enter the marketplace in the medium-term.