CBRE says record take-up of Dublin office space this year

Headline rents have remained stable despite suggestions they would drop

One Molesworth Street on the corner of Dawson Street and Molesworth Street, one of Dublin’s newer office spaces. Photograph: Bryan Meade

One Molesworth Street on the corner of Dawson Street and Molesworth Street, one of Dublin’s newer office spaces. Photograph: Bryan Meade

 

Appetite for office space in Dublin is showing no sign of abating as the capital recorded a record volume of take-up in the first quarter of 2018.

Figures from property consultants CBRE show that 83,493sq m of office leasing transactions were signed in the Dublin market in the first three months of the year – up more than 69 per cent on the first quarter of 2017.

Some 60 lettings were signed in Dublin in the period, with 28 transactions agreed with Irish companies, according to CBRE executive director Marie Hunt.

US companies accounted for 16 transactions in the period, while there were seven lettings to UK companies.

Despite suggestions from some quarters that Dublin’s office market is in line for a slowdown, pre-letting deals – whereby companies commit to buildings still under construction – accounted for more than 30 per cent of take-up in the first quarter.

As with previous periods where large tech companies, including Google and Facebook, have signed up significant swathes of office space in the city centre, tech tenants were in the majority in terms of take-up. Some 44 per cent of lettings went to tech companies, although that was down from 54 per cent the previous quarter.

Financial services companies, meanwhile, accounted for 15 per cent of leasing activity.

Appetite

Dublin’s stubbornly low vacant rate tightened further in the quarter to 5.9 per cent overall, down from 6.08 per cent in the previous quarter.

“Despite evidence of increased appetite for suburban offices, the city centre continues to dominate. In fact, the city centre accounted for 72 per cent, or 60,279sq m of office take-up in Dublin in the first quarter of 2018,” said Anne Louise Hannon, a CBRE associate director, who noted that 41 individual lettings were signed in the city centre.

Commercial real estate analysts had suggested prime office rents would drop to around €62 per sq ft this year, but prime headline rents have remained stable on last year at around €65 per sq ft.