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Office market activity set to hit 3m sq ft in 2016

Written by Robert McHugh, on 14th Oct 2016. Posted in Ireland

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New figures released by JLL this week show that it has been another strong quarter for office demand with close to 730,000 sq ft take-up across 44 deals.

This is a third higher than last quarter and has boosted year-to-date volumes to 1.7 million sq ft. 

In terms of general trends, demand from occupiers remains focused on space in the city centre accounting for 72% of take-up with Dublin 2 the dominant sub-geography.

In terms of size, the most active category remains sub-10,000 sq ft, accounting 61% of deals. There were 3 deals greater than 50,000 sq ft this quarter, and the largest letting was Grant Thornton at 13-18 City Quay (110,000 sq ft).  

Technology, Media and Telecommunications (TMT) companies continue to drive demand, accounting for 32% of deals. This includes lettings to Intercomm, Google, MTT, Voxpro and Oracle in the last three months.

On the supply side, there is currently available, there is 4.2 million sq ft of space under construction across the city centre and suburbs, which will be delivered in the next 3 years. 34% of this is currently pre-let. This includes Capital Dock (310,000 sq ft), Bolands Quay (200,000 sq ft), Number One Ballsbridge (135,00 sq ft), 1 WML (120,000 sq ft), 10 Molesworth (115,000 sq ft), Velasco (50,000 sq ft), 5 Harcourt Road (50,000 sq ft) and 21 Charlemont (37,000 sq ft).

Prime rents remain steady at €60 per sq ft, although there is evidence of quoting rents at €65 per sq ft. This is for new buildings in the city centre and there have only been a limited number of deals that have achieved this rental level. 

Associate Director and Head of Research, Hannah Dwyer said, "It is positive to see the strong level of demand for office space continue, with an increase in take-up activity in Q3. With over 600,000 sq ft of space reserved for Q4, we are expecting that 2016 will be another strong year for the Dublin office market, and if all deals that are reserved sign before the year-end, we could see total volumes for 2016 achieve similar levels to 2015 of 3 million sq ft."

She added, "On the supply side, the vacancy rate remains tight, particularly in core locations and for prime space. More supply will become available in 2017 as some of the key pipeline schemes that are currently under construction are delivered. We have still not seen a new available office building complete in Dublin, with all schemes delivered to date, pre-let before completion." 

Source: www.businessworld.ie

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