Take-up of office space falls 50% in first quarter

Take-up of office space in the Dublin market in the first three months of this year was 50 per cent lower than in the final quarter of 2015. However, the 45,056sq m (485,000sq ft) rented since Christmas was 45 per cent higher than in the same quarter of last year, according to the latest office report from agents JLL.

A total of 34 deals were transacted in the last three months of 2015 with 14 of them in Dublin 2. However, the largest letting was in Dublin 3 where the ESB rented 10,497sq m (117,000sq ft) of space over two buildings in The Gateway development on East Wall Road. This will be used while the ESB redevelops its headquarters on Fitzwilliam Square.

The vacancy rate in the city centre remains tight at 3.7 per cent while the overall vacancy rate for Dublin stands at 8 per cent. The average deal size in the last three months was 1,327sq m (14,292 sq ft) while there were only two lettings above 5,574sq m (60,000sq ft) in the same period.

Prime rents remain strong at between €592 and €700 per sq m (€55 and €65 per sq ft). Rents in the suburbs range from €215 and €323 per sq m (€20 and €30 per sq ft).

With an ever increasing number of new developments under way, JLL estimates that about 2.8 million sq ft of new space is being built, while a further 662,000sq ft is under refurbishment with more schemes in the pipeline.

Positive outlook

The agency says that the outlook remains positive for supply over the coming three years and demand was not expected to outstrip supply as the new space on the way was falling short of the long-term average take-up.

“While 2015 ended with concerns of how supply would cater for demand, 2016 now looks on course to see continued growth and strong levels of take-up, a further decline of the city centre vacancy rate and construction under way in both the city centre and suburban markets.”

JLL also reported that there had been 144 new inquiries for space in the first three months of this year, with 72 per cent of the inquiries for 929sq m (10,000sq ft) or less.