A report released by DTZ Sherry Fitzgerald has revealed that Galway's lack of city centre space is significantly hindering the take-up of commercial properties in the city.

In the Galway office market, the severe lack of space in the city centre hindered activity resulting in very weak take-up during the quarter. In contrast, Limerick reported exceptionally robust take-up during the three month period, with activity levels in the Cork office market remaining strong. Supply levels in the Galway suburbs remain quite strong.

According to the report, which centred on the first quarter of 2008, a shortage of good quality industrial accommodation persisted in the Galway industrial market during the quarter, which continued to impact take-up levels. On a positive note, development activity in this market has eased, a factor that should help bring the market back towards equilibrium.

During the first quarter of 2008, take-up activity in the Galway office market remained impeded by the continued lack of suitable accommodation, particularly in the city centre. As a result the quantity of newly occupied space was relatively weak, totalling 1,600 sq m for the three month period. This low level of take-up can also be attributed to deteriorating confidence levels associated with the predicted slowdown in economic growth, causing potential tenants to adopt a more cautious approach.

In the twelve months to quarter one, a total of 17,650 sq m of accommodation was taken up. This represents a 35 per cent increase on the same period the previous year, largely as a result of relatively strong activity during the latter half of 2007. Almost all of this space, 93 per cent, was located in the suburbs in business parks such as Ballybrit, reflecting the profile of available space.

Supply levels in the office market weakened during the quarter with the quantity of available space declining to reach 22,600 sq m. This is 38 per cent lower than the same period in 2007 and the lowest level witnessed in seven years. Furthermore, all of this available space is located in the suburbs. This highlights the severe shortage of accommodation in the city centre which has continued to persist during the first quarter of 2008.

Reflecting the shortage of accommodation in the region the overall vacancy rate continued its downward trend to reach 8.3 per cent in quarter one, down substantially from 13.5 per cent during quarter one 2007. Supply levels in the suburbs remained strong with the vacancy rate standing at 14.1 per cent. In the city centre the vacancy rate remained at zero for the second consecutive quarter. However there are currently a number of schemes at various stages of the development pipeline that will help ease these shortages going forward.

The total stock of accommodation in the office market remained unchanged at 273,300 sq m at the end of the quarter. The quantity of space under construction increased by 54 per cent during the quarter to stand at 8,650 sq m, all of which consists of speculative development. The majority of space being developed, 62 per cent was located in the city centre. This will go someway towards alleviating the severe shortage of modern office accommodation that currently exists in this region. In addition construction work is due to commence shortly on the former Crown plant on the Monivea road on the east of the city which will provide approximately 13,900 sq m of office space once completed.

Shortages of available space in Galway city centre continued to impede take-up activity in the office market during the quarter. However, supply levels in the suburbs remain relatively strong. On a positive note, construction activity has increased significantly during the quarter with a substantial proportion located in the city centre which will go some way towards addressing the shortages in this market. The industrial market witnessed moderate take-up during the quarter, although the level of take-up over the past twelve months was very weak, reflecting a continued shortage of available accommodation. In particular, the vacancy rate in this market remains well below equilibrium a factor which is expected to continue in the medium term with the only space currently being developed being designed to suit the needs of a specific occupier.

Comments (0) »

Show/Hide comment form

Name

Email

Title

Comment

Write the displayed characters

Add Comment