The latest research by Cushman & Wakefield suggests that the office sector remains a very dominate feature of the Irish investment market.
The property experts have found that the office asset class recorded an uplift in both the volume and value of deals taking place in the first half of the year. Approximately €878.1m worth of office assets traded hands, accounting for 55% of total Irish investment turnover. This compares to €341.7m invested in offices in the first half of 2017.
The Dublin market absorbed 90% of this capital inflow. Within Dublin, the market saw a high level of investment both within the Central Business District (CBD) and in the wider county. Early recovery years saw office investment within Dublin polarised by the CBD, however, the past 18 months have witnessed a more dispersed pattern of investment.
In the first half of 2018, turnover in Dublin was stronger outside the CBD, with transaction activity of approximately €404m recorded in the secondary and suburban markets.
The key aspect of the Dublin office market however continues to lie in development activity, according to Cushman & Wakefield. Now standing at its highest level in the current cycle, 390,500 sq m of space was under construction at the end of June, with no letup in interest and enquiries for these buildings.
To date this year, approximately 60,450 sq m of office space has been delivered in Dublin, opening up new options for both entrants and expanding occupiers. A further 140,000 sq m of space is due to be delivered over the latter half of the year, of which a very positive 53% is already pre-let or reserved.
Focusing again on the CBD, 76% of the volume of space due to be delivered in the CBD this year has been pre-committed to key occupiers such as JP Morgan, the IDA, WeWork and Indeed.com.
Cushman & Wakefield believe positive developments in construction activity is crucial to satisfying demand requirements, stabilising rental growth and maintaining Dublin’s attractiveness relative to comparable European cities.
Prime Dublin office rents remained unchanged in quarter two, at €646 per sq m. While this is now ahead of previous peak levels, Cushman & Wakefield forecasts that rents will remain at this level out to 2020.
Commenting on the market, Senior Surveyor at Cushman & Wakefield, Patrick Kiersey said, "Co-working/flexible workspace providers are continuing to take large amounts of space, accounting for an 8% share of take up in the first half of 2018, compared to 3% in the same period in 2017. These providers offer flexible fitted office space which tends to suit fast growing companies or tenants who cannot commit to long-term leases."
Source: www.businessworld.ie