Auctioneers report strong demand for industrial units in Limerick
THE EXISTING stock of warehouse and industrial units in Limerick is struggling to keep up with demand in the marketplace.
That’s according to leading city auctioneer Gordon Kearney of Rooney Auctioneers, who was reflecting on commercial property sales in 2023.
It’s a view reflected by Tom Crosse of GVM Auctioneers, who said rents in Limerick are now fetching an average of €7 per square foot.
Sale prices have climbed to an average of €100 per square foot, he added.
Negative interest rates sparked strong activity in terms of commercial sales in 2022, this tapered off slightly last year.
But Mr Kearney added: “Demand and activity levels were still strong during 2023, in particular for industrial and warehouse units and the smaller scale office market.”
Mr Crosse has described the commercial market as being “tentative” last year.
“Buyer caution is influenced mainly by the numerous rises in interest rates throughout 2023. Many commercial properties transact based on yields and with a surge in borrowing costs, intending buyers adopted a wait-and-see approach,” Mr Crosse said.
“Most transactions mainly involved owner/occupiers buying or renting for logistical reasons,” he added.
The conversion of many Georgian buildings in the city centre from office to residential use has also led to a rise in demand for new clean office space.
This has been driven largely by an accelerated take-up of the Living Cities initiative.
Announced during the era of former Finance Minister Michael Noonan, this is a tax designation which affords buyers a lower bill to encourage take-up of derelict Georgian properties in the city.
Early interest was low, but it has picked up in the past couple of years.
As Mr Crosse reflected: “A feature of the local market is the continuing purchase and development of inner-city Georgian buildings for residential use. Many buildings changed hands throughout 2023, number 12 Glentworth Street as a case in point at a figure of €350,000.”
As in recent years, the high-street retail sector continued to struggle.
But Mr Kearney highlighted three high-profile leases made by his firm.
International coffee chain Cafe Nero opened in Thomas Street in the city centre in the autumn, while Chandler House, a branch of La Cucina took on a new lease of life as an Indian restaurant, Swaad.
A wine shop, Cavavin, opened in Bedford Row during 2023.
Looking ahead to this year, Mr Kearney expects to see continued demand for warehouse/industrial units and smaller office suites.
“With predictions of a reduction in banking interest rates, we are of the opinion that 2024 could be as active, if not more active, than 2023 in both residential and commercial sectors. However, the pipeline of new stock in both commercial properties such as warehouse/industrial units and office units and in the residential sector regarding houses is well below current demand levels,” he said.
Sadly for buyers, it has led Mr Kearney to predict continued price inflation.
Mr Crosse expects both the overall commercial and residential market to rebound well as the year progresses.