Last quarter of 2013 sees big take-up of Dublin offices

A bumper fourth quarter of 2013 boosted overall take-up and investment activity in the Dublin office market, according to agent CBRE’s latest review of the sector.

Office take-up in the capital was up more than 47 per cent quarter-on-quarter in Q4, and up 25 per cent year-on-year.

CBRE also reports that there were 45 individual office lettings signed during Q4 2013, with 85 per cent of take-up in Q4 in the city centres.

“Some 49 per cent of office take-up in the last three months of 2013 was for space smaller than 465sq m [5,000sq ft],” said CBRE’s Marie Hunt. “There was also four large transactions of more than 4,645sq m [50,000sq ft] signed.”

Prime office yields stood at 5.75 per cent at year-end and there was further increases in office investment activity in the last quarter of 2013, with €331.65 million invested in Dublin offices in the period.

Some 61,492sq m of office transactions were signed in Dublin in Q4 and this brought total office take-up in Dublin for 2013 to almost 171,000sq m – 25 per cent higher than 2012.

In total there were 184 transactions signed in the Dublin office market during 2013, with 45 of these in Q4. According to CBRE, 34 per cent of office take-up during 2013 comprised expansions, 27 per cent were new entrants and 39 per cent comprised relocations.

The overall office vacancy rate at the end of Q4 was 15.33 per cent, down from 16.41 per cent last quarter. CBRE noted that there was over 620,000sq m of office accommodation being officially marketed to let in the Dublin market at the end of Q3 2013. “However much of the available accommodation is secondary in nature and much of the grade A accommodation that is available to let is relatively small and not capable of accommodating larger requirements,” according to CBRE.

Demand for space in the capital mainly came from the high-tech sector and financial services, which accounted for 24 per cent and 23 per cent respectively of all office transactions in 2013. The Dublin 2/4 postcode had 58 per cent of the take-up.

Demand for space in the suburbs was more modest, with 9,048sq m of office transactions signed in Q4 in 11 transactions. The largest suburban transactions to complete in the quarter included the letting of 2,323sq m to Curtis Wright at Block 5, Richview Office Park in the south suburbs and the letting of 2,230sq m to Heatons in Airton House in the west suburbs.