Demand for Dublin office space continues to grow

Take-up in the Dublin office market strengthened during the third quarter with lettings agreed on close to 67,819sq m (730,000sq ft) of space across 44 deals, according to agent JLL.

"This is a third higher than last quarter and has boosted year-to-date volumes to 1.7 million square feet," says Hannah Dwyer, associate director and head of research at JLL.

“With over 600,000sq ft of space reserved for Q4, we are expecting that 2016 will be another strong year for the Dublin office market, and if all deals that are reserved sign before the year-end, we could see total volumes for 2016 achieve similar levels to 2015 of three million sq ft.”

Occupier demand remains firmly focused on the city centre which accounted for 72 per cent of take-up, while Dublin 2 was the most active area of the market.

Most of the demand (61 per cent) was for less than 929sq m (10,000sq ft) but there were also three deals for requirements greater than 4,645sq m (50,000sq ft). The largest letting during the quarter was the 10,219sq m (110,000sq ft) taken up by Grant Thornton at 13-18 City Quay.

Technology, media and telecommunications are still key drivers of demand for office space and accounted for 32 per cent of deals in Q3. This included lettings to Intercomm, Google, MTT, Voxpro and Oracle.

Supply side

On the supply side, JLL reports that there is 390,193sq m (4.2 million sq ft) of space under construction across the city centre and suburbs that will be delivered over the next three years, with 34 per cent of this pre-let. This includes landmark schemes at Capital Dock on Sir John Rogerson’s Quay, Bolands Quay on Barrow Street and Number One

Ballsbridge

on Shelbourne Road in Dublin 4.

Hannah Dwyer of JLL says that the vacancy rate remains tight, particularly in core locations and for prime space.

“More supply will become available in 2017 as some of the key pipeline schemes that are currently under construction are delivered,” she says. “We have still not seen a new available office building complete in Dublin, with all schemes delivered to date pre-let before completion.

“Prime rents remain steady at €60 per sq ft, although there is evidence of quoting rents at €65 per sq ft. This is for new buildings in the city centre and there have only been a limited number of deals that have achieved this rental level.”