Office rentals rise sharply as Covid restrictions ease

Research finds significant office take-up in suburban locations

The take-up of office space in Dublin rose sharply in the third quarter of the year as the loosening Covid-19 restrictions turned attention to the post-pandemic work environment.

Research from professional services firm JLL, which tracks Dublin office market deals, found take-up of space in the three months to the end of September was almost 428,000 sq ft, a significant rise on the 45,000 sq ft in the first quarter and 216,000 sq ft in the second.

A total of 43 deals were recorded in the latest quarter, although the three-month period was still down on previous average quarterly volumes.

The suburban market saw significant take-up, with 58 per cent of the office space taken outside the city centre. JLL's research also showed the largest transaction of the quarter was a 44,000 sq ft letting to BNP Paribas Bank at the Termini in Sandyford, with the second largest in Cherrywood in a letting to Accenture for almost 37,000 sq ft.

In the city centre, the largest deal was 29,770 sq ft to law firm DLA Piper at 40 Molesworth Street.

Strategising

"The easing of Covid-19 lockdown restrictions during Q3 has allowed occupiers to begin strategising for the post-pandemic office environment, which has led to the increase in new take-up as employers and employees migrate to new working norms," said Niall Gargan of the Research Team at JLL Ireland.

“The JLL EMEA Research Team reported that employees wish to opt for a three-day working week in the office as part of a hybrid model. This demonstrates that the need for office space will remain as the global community adapts to a post-pandemic working life. Occupiers are planning for the future.

“There is over 900,000 sq ft reserved and we are forecasting that end of year take-up will surpass the 1 million sq ft mark. This is a great achievement in a year where fit outs could not take place for five months due to lockdowns.”

Mr Gargan noted further positive developments for the sector, including the completion of almost 500,000 sq ft of floor space in Dublin throughout the third quarter.

“This is a significant volume of space to come online and we forecast that a further 1.5 million sq ft will be completed by Q1 2022 as the construction industry continues to complete projects which were delayed due to lockdown restrictions.”

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist