CMake with custom install path and multiple libraries in different directories

Question

I am new to cmake, I know a lot of similar questions are asked, but I don't seem to figure out how to do this.

I have very large project which can be simplified with this structure:

Parent_dir
   --src
      --main1.cpp
      --main2.cpp.
   --include
      --lib_dir_1
         --f1.cpp
         --f1.h
      --lib_dir_2
         --f2.cpp
         --f2.h
   --build
   --install
      --include
      --share
      --lib
      --bin

I do not have access to /usr/include, /usr/lib, /usr/bin, and /usr/share because it is an account on a cluster. My idea was to run cmake in build dir and install library .o and executives in install dir. My CMakeFile.txt are:

Parent_dir/CMakeFile.txt
    cmake_minimum_required(VERSION 3.13)
    set(CMAKE_TRY_COMPILE_TARGET_TYPE "STATIC_LIBRARY")
    project(MyProject VERSION 2.0)
    set(CMAKE_INSTALL_PREFIX "${CMAKE_SOURCE_DIR}/install")
    set(CMAKE_CXX_STANDARD 17)   
    add_subdirectory("include/")
    add_subdirectory(src)

Parent_dir/include/CMakeFile.txt
    add_subdirectory(lib_dir1)
    add_subdirectory(lib_dir2)

Parent_dir/src/CMakeFile.txt
    add_executable(M1 Main1.cpp)
    target_include_directories(M1 PUBLIC "${CMAKE_SOURCE_DIR}/include/lib_dir1")
    find_library(LIB_1 lib1)
    target_link_libraries(M1 lib1)
    install (TARGETS M1 DESTINATION ${CMAKE_INSTALL_PREFIX})     
    #add_executable(M2 Main2.cpp)
    #target_include_directories(M2 PUBLIC "${CMAKE_SOURCE_DIR}/include/lib_dir2")
    #find_library(LIB_2 lib2)
    #target_link_libraries(M2 lib2)
    #install (TARGETS M2 DESTINATION ${CMAKE_INSTALL_PREFIX})

Parent_dir/include/lib_dir1/CMakeFile.txt
    add_library(lib1 SHARED f1.cpp f1.h) 
    FIND_PACKAGE(Boost COMPONENTS program_options REQUIRED)
    INCLUDE_DIRECTORIES(${Boost_INCLUDE_DIRS})
    TARGET_LINK_LIBRARIES(lib1 ${Boost_LIBRARIES})
    target_include_directories(lib1 PUBLIC ${CMAKE_CURRENT_LIST_DIR})


Parent_dir/include/lib_dir2/CMakeFile.txt
    add_library(lib2 SHARED f2.cpp f2.h) 
    target_include_directories(lib2 PUBLIC ${CMAKE_CURRENT_LIST_DIR})
    find_library(LIB1 lib1)
    target_link_libraries(lib2 lib1)

At the moment I am only testing building M1 that depends on lib1, I commented stuff referring to M2 executable. I know that find_library(LIB1 lib1) should find lib1 library and put its path to LIB1 variable, so clearly I am making a mistake when targeting and linking because for example in Parent_dir/src/CMakeFile.txtit should be target_link_libraries(M1 ${LIB1}), but I am getting an error: `The following variables are used in this project, but they are set to NOTFOUND. Please set them or make sure they are set and tested correctly in the CMake files: LIB_1.

So find_library never found lib1, if I link as in files above, cmake is fine, make is fine, make install is fine, and in install directory I see M1 executable which does not work when used stating that error while loading shared libraries: liblib1.so: cannot open shared object file:...

So clearly I messed something up and I've been running in circles for two days. Biggest issue with online resources is that a lot of tutorials don't cover the issue how to navigate installation to custom dirs. Note that I have built other packages with typical configure --prefix approaches before and my desire to have install/include share lib bin directories is simply due to previous experience, in CMakeFiles above I only tried to navigate executable M1 to install dir, it worked, but I have no idea where lib1.so is built and whether I messed everything in CmakeFiles.

Also I am not sure if the code structure I am making is "good", perhaps I should move lib1_dir and lib2_dir to src? Problem is that in these libraries I have 100s of files so the structure above made most sense.

PS: I do not have cmake-gui, cluster has 3.15 and 2.18 version and gui only exists for 2.18 version.

UPDATE:

Managed to get installation to work (check answer below), but some issues still remain:

Executables are now in install/bin, library files are in install/lib. I am just not sure if everything is linked properly, both lib1 and lib2 need to be shared libraries as I have about 6 executables that need them. The xml resource is needed by lib1, I don't know how to change the code to look for it other than the current dir. I could set its location to install/bin, but that is a bit dirty as if someone installs the package on other machine, the path to file would be different. I doubt that CMAKE environment variables work within C++?

I would also like to have all .h files from both libraries in install/include dir, how should I go about that?

Can someone explain whether this is correct. I am skeptical with line in src where I link libraries. I did not use find library, because it fails, if I hint it with install/lib location, than it says it cannot find .h files needed by the library. I am suspecting that by doing target_link_libraries(M1 lib1) I am directly recompiling the whole library to attach it to executable, rather than finding existing one and doing simple linking.