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Dublin office take nears 2m sq feet

Monday, December 16 17:27:26

The office market had a strong final quarter with take-up at the highest quarterly level since 2008 and with office take up in the Capital just under the two million square foot mark for 2013.

Take-up of 766,726 sq.ft. is 67pc higher than Q3 2013 and has helped to boost total take-up for the year to 1.9m sq.ft. This is a 23pc increase on the 1.5m sq.ft. recorded in 2012, according to the latest Jones Lang LaSalle Office Market Bulletin Q4 2013.

Take-up was impacted by 5 large deals greater than 50,000 sq.ft., all of which were in Dublin 1 and Dublin 2 geographies. The largest deal this quarter was the letting of 4 Grand Canal Square (121,567 sq.ft.) to Facebook. Despite an increase in the number of larger deals this quarter, demand remains focused on smaller lettings, with 72pc of transactions for space less than 10,000 sq.ft.

Occupier preferences remain focused on location and quality, with the greatest demand for prime buildings in the core Dublin 2 and Dublin 1 geographies.

Fionnuala O' Buachalla said that "The overall vacancy rate remains high at 18pc, however there are certain locations that have limited modern stock. In response to this, there are a number of developers due to start on site with speculative offices in Dublin city centre."

Supply for prime space has continued to tighten, particularly in core locations and for certain size categories, with occupiers now faced with a decreasing choice. Although there is still 7.1m sq.ft. of space vacant across the whole of Dublin, there is only 2.1 m sq. ft. of vacant Grade A space.

Of this space just over 620,000 sq.ft. is located in the core Dublin 1 and Dublin 2 markets. There has already been evidence of refurbishments of secondary space in prime locations in order to meet occupier demand, and this is expected to continue into 2014. In addition, it is likely that we will start to see the first signs of construction in the next 6 months, with several large projects already planning to start at the beginning of next year.

Deirdre Costello states: "On the back of an increase in demand and emerging rental growth there is significantly more confidence in the Dublin market. The choice of Grade A stock is eroding which will drive rental growth and we expect to see a tightening of incentives for these buildings."