With the industrial market the last remaining sector to catch the attention of investors, agents are reporting an upsurge in investment activity in recent months particularly for buildings leased for more than the standard five-year period.

One such investment goes on the market today through joint agents DTZ Sherry FitzGerald and TWM when they guide €3.2 million for Units 7 and 8 Airways Industrial Estate, Santry, Dublin 9, which have almost 10 years to run on the lease. Both buildings are let to Essentra Packaging Ireland on a 15-year lease with a break option in year 10.

The lease on Unit 7 began in July, 2015, while the lease on Unit 8 commenced in February, 2016. The overall annual rent in years one to four is €300,000 and this increases to €320,000 in year five for both properties.

There are open market rent reviews every five years with the current rent working out at €3.41 per sq ft – a figure with obvious reversionary potential when the next rent review comes around in 2020. Based on the €3.2 m asking price, a purchaser can bank on an initial yield of 8.97 per cent when standard purchasing costs are taken into account.

Essentra Packaging Ireland, who are long-term tenants of the Santry building, recently regeared the lease and refurbished the facility, demonstrating their commitment to the location. Airways Industrial Estata has easy access to all the main transport nodes in Dublin with Dublin Airport, the Port Tunnel, the M50 and M1 all within 2kms.

Brendan Smyth of DTZ said the asking price would break back to €36 per sq ft and equate to around one-third of current build costs for a facility of this standard. Ollie Lyons of TWM said the long-term lease and the potential for rental growth was likely to interest a broad range of investors.