Largest letting of year agreed in Sandyford

The new tenant will pay a rent of €242 per sq m (€22.50 per sq ft) on a short lease of nine years with a break option in year six – an arrangement unheard of in the boom, writes JACK FAGAN.

AN AMERICAN outsource sales organisation has leased 3,716sq m (40,000sq ft) of space in a new office development at Sandyford, Dublin 18 in what is the largest single letting so far this year in a grossly oversupplied Dublin office market.

ServiceSource, which provides support for technology companies around the world, is moving from Cherrywood to Sandyford where it will occupy two floors of the newly developed scheme, The Chase, in Sandyford Business Park.

ServiceSource will be paying a rent of €242 per sq m (€22.50 per sq ft) for the accommodation which will be fully fitted out by the owners, a consortium led by businessmen Derek O’Leary and Reg Tuthill, and a group of private investors represented by AIB Private Banking. The new tenant will also be paying an annual fee of €1,300 for each of 36 on-site car-parking spaces.

The nine-year lease from next September will provide for a break option in year six. Although short leases such as this one were unheard of a few years ago, they have now become more commonplace because of the poor business climate at present and the surfeit of new office space available, particularly in the Sandyford area.

Deirdre Hayes of letting agent HT Meagher O’Reilly says the short timescale shows the willingness of landlords to act expediently in the current market to provide excellent letting terms as well as a top class fit-out.

ServiceSource, which was advised by Mark Smyth of Knight Frank, had been trading for a short period out of Cherrywood where it had taken a sub-lease of space previously occupied by Lucent.

The fast-growing US company focuses exclusively on increasing support and maintenance revenue for technology companies and has seen its business grow rapidly in the past few years.

Jeff Bizzack, president of ServiceSource, says the acquisition of the new Dublin office facilities was key to their global growth and expansion plans in the Europe-Middle East-Asia region.

“We continue to hire sales professionals to support our growing partnerships and this new location places us in close proximity to our clients’ facilities, as well as providing an excellent work environment for our employees.”

It is the first letting in The Chase which stands nine floors over a basement car-park and has a total lettable area of 16,200sq m (174,376sq ft). Office space is available to let in units from 721sq m (7,761sq ft) to 6,300sq m (67,813sq ft).

The fall-off in office lettings in the Dublin market suggests that it could end up as the worst year for over a decade.

Some experts suggest that take-up for the year as a whole may not even exceed 50,000sq m (538,195sq ft) – a long way short of the 300,000sq m (3,229,170sq ft) let in 2007 and the 210,000sq m (2,260,419sq ft) occupied in 2008.

Before the global financial crisis developed, the Dublin office market looked like having another bumper year, due mainly to ambitious expansion plans by Bank of Ireland and AIB Capital Markets. Those grandiose plans have been set aside for the moment and are unlikely to be proceeded with until some semblance of normality returns to the banking market.