Dublin city centre can continue to command prime office rents of between €60 and €65 per sq ft, notwithstanding the record levels of take-up experienced by the market in recent times, according to HWBC’s latest Dublin Office Market Review.
While the majority of the 1.73 million sq ft of space let to the end of June was transacted in the first quarter, HWBC says it is confident the demand pipeline will hold up, with up to 1 million sq ft of space reserved and in advanced stages of negotiation for completion in the second half of the year. Companies such as Amazon, WeWork and Slack are continuing to expand and are expected to sign contracts for additional office space by the end of this year.
Some 905,000sq ft of new space was completed in the first half of 2019, with 75 per cent of this pre-committed on, or before practical completion. Beyond that, nearly half of the space under construction in the city and scheduled for completion by the end of 2021 is already reserved.
In an orderly Brexit scenario, HWBC says it doesn’t anticipate upward pressure on prime rents. A no-deal “hard Brexit”, however, could drive rents higher if it sparks a wave of fresh demand from companies exiting London, or foreign direct investors favouring Dublin over the uncertain environment in the UK, particularly around the free movement of people.
Commenting on the prospects for the capital’s prime office sector, HWBC managing director Tony Waters said: “The strength of the office market in recent years has tempted some commentators to wonder if it may have peaked. Whilst predicting the future can never be certain, the available evidence gives us every reason to think this isn’t the case, and if a ‘hard Brexit’ pushes more companies out of the UK we may even see rents rising higher.”