Take-up of industrial and logistics space in Dublin was down 31% last year compared to 2020.
A new report from property advisor Savills Ireland reveals a total take-up of 2.3m sq ft, 20% below the five-year average.
Just 79 transactions were completed, the lowest level on record.
According to the report, the decline forms part of a wider trend, with the average number of deals completed over the last three years standing at 85, down from an average of 112 over the previous five years.
Gavin Butler, Director of Industrial and Logistics, said take-up has become increasingly dependent on new builds.
"Leases of new stock accounted for 48% of annual take-up, despite accounting for just 1% of total stock.
"A further 22% of take-up was in units built in the 2000s, with pre-2000's stock making up the remaining 30%.
"With no availability in stock built in the 2010s occupiers face the choice of either looking further up the pipeline for modern stock or settling for older lower quality stock, with no middle ground," he said.
The report reveals that the share of take-up accounted for by sales - as opposed to lettings - fell to 14% in 2021, which represented its lowest level on record and down from 66% in 2014.
"Traditionally, selling rather than letting was the easier route for owners to dispose of a vacant holding," Mr Butler said.
"Lettings generally took more time and involved greater risk.
"However, the progressive tightening of available space witnessed in recent years has changed this.
"Owners are now leasing vacant space and selling it as an investment, thus realising a higher end value," he said.
According to the report, 2.2m sq ft of new industrial and logistics stock is to be completed in 2022.
However, two-thirds this space is already committed, meaning further supply is required to meet occupier demand.
"This represents a more than doubling of last year's new supply, which was a record year in itself," Mr Butler said.
"It is worth noting that because all of this projected delivery for 2022 is already on-site, we do not forecast any slippage into 2023.
"While the headline delivery number is high, two-thirds of it is already committed, meaning further commencements are required to meet prevailing occupier demand," he added.
The report reveals that the largest deal of 2021 was the lease of 200,000 sq ft in the former Lufthansa building in Baldonnell Business Park in the third quarter.
Logistics firm Kuehne and Nagel's pre-let of 165,000 sq ft in Unit 2, Horizon Logistics Park, in the second quarter was the second-largest deal of the year.
