Office rentals in Dublin halved in opening six months of year due to Covid-19

Agents Knight Frank says logistical challenge of signing deals during lockdown the biggest barrier to letting offices in second quarter

Just 83,000sq ft  of office space was let in the second quarter of this year, the period when  the lockdown was most severe. Photograph: Getty Images

Just 83,000sq ft of office space was let in the second quarter of this year, the period when the lockdown was most severe. Photograph: Getty Images

 

Office rentals in Dublin halved in the opening six months of the year as Covid-19 forced workers to stay at home, figures released on Monday show.

Just 83,000sq ft (7,710 sq m) of office space was let in the second quarter of this year, the period during which the lockdown was most severe, according to agents Knight Frank.

That brought total rentals for the six months to June 30th to 84,000sq m, Knight Frank says in its Dublin Office Market Overview, published on Monday.

“The vacancy rate stood at 7.3 per cent at the end of quarter two, up from 6.5 per cent in quarter one, and from 6.4 per cent in quarter two 2019,” the report says.

Technology companies accounted for the almost two-thirds of new lettings during the second three months of 2020.

Hibernia Real Estate Investment Trust’s deal to pre-let 2,220sq m at 2 Cumberland Place to hi-tech firm 3M was the biggest transaction of the second quarter.

Kevin Nowlan, Hibernia’s chief executive, said last week that other potential tenants were interested in taking space in the building on the southside of Dublin city centre. Work on the block is due to finish in December, he added.

Among other notable transactions during the period, Unity Technologies, which provides computing services to other businesses, sub-let 706sq m from lawyers Dillon Eustace on Sir John Rogerson’s Quay.

Investment adviser Vanguard took 576sq m at St George’s Quay Plaza, while recently-arrived British lawyers Dentons sub-let 390sq m from Nuritas at Joshua House on Dawson Street.

Knight Frank says the logistical challenge of signing deals during lockdown was the biggest barrier to letting offices in the second quarter.

The property firm expects transactions that would have otherwise gone through during that time to be completed over the third quarter of the year.

“Beyond the expected completion of these deals, take-up for the remainder of the year will depend on economic confidence going forward,” Knight Frank’s report says.

The company adds that businesses have reserved more than 65,000sq m of Dublin offices, “but it remains to be seen how much of this will translate into take-up”.