Dublin office lettings increase by 11% in first quarter of 2017

Take-up of office space in Dublin was 11 per cent higher in the first quarter of 2017 compared with the same period last year.

This is according to agent JLL’s latest research in the sector, which points to a solid start to 2017 where 40 letting deals resulted in almost 51,000sq m (550,000sq ft) of space being taken up.

Demand was strongest from technology companies, which accounted for 45 per cent of the space occupied. Google, Informatica, Multifonas, Oracle and Citrix have taken up space since January.

The public sector, which accounted for 34 per cent of take-up, was also particularly active with the Office of Public Works (OPW), the Department of Social Welfare and Pobal – a not-for-profit company that manages programmes on behalf of the Government and the EU – securing new office space.

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JLL suggests the overall Dublin vacancy rate in the office market stands at 8.9 per cent, but this falls to 4.8 per cent in central area.

‘Impressive pipeline’

However, head of research at JLL Hannah Dwyer points to an "impressive pipeline" of office space coming on stream through development and refurbishment activity.

“There are currently 3.2 million square feet of available office space under construction in Dublin which will be delivered in the next 18 months and 76 per cent of this is in the city centre. With the amount of space leased in Dublin in the last two years totalling between 2.5 million and three million square feet, this pipeline space only meets one year’s demand. But there is an additional three years’ supply in various stages of planning,” Ms Dwyer said.

In relation to Brexit, Ms Dwyer said inquiries from UK-based firms looking to relocate to Dublin had “picked up momentum” in the past few months, with companies making “site and building visits” in Dublin and undertaking due diligence.

She said JLL was working with a number of clients which were “seriously considering” a move to Dublin as part of their Brexit strategy.

“We are expecting to see some direct Brexit-related deals signing in the next three months. Dublin is being considered alongside other European cities. Our stiffest competition appears to be coming from Frankfurt, Paris, Amsterdam and Madrid,” Ms Dwyer said.

“In terms of sectors, we are seeing greatest demand from UK-based financial companies and related services, and tech firms. Sizes are ranging from space for 150 people up to 1,000 people, with only a few at the larger end of this scale.”