Property consultants, CBRE Ireland today released figures for the volume of office leasing activity achieved in the Dublin market in the first nine months of 2019, which shows that a total of 192,790 square metres of transactions were signed in the Dublin market in the first three quarters of the year.
According to CBRE, 40,589 square metres of office leasing transactions were signed in the Dublin market in the third quarter of 2019. While year-to-date take-up is down approximately 12% on the volume of transactional activity recorded in the first three quarters in 2018, there are several transactions currently in legals which may sign in the final quarter of the year and result in 2019 overall take-up coming close to last year’s record volumes.
More than 153,000m2 of office stock was reserved in the capital at the end of September, which the property consultants say is encouraging. The overall vacancy rate in Dublin fell again in the third quarter and is currently 5.32%.
There were 2 pre-letting transactions signed in the third quarter 2019 that accounted for 25% of Dublin’s take-up during the quarter. It is estimated that 22 of the 37 office transactions signed in Dublin during the third quarter were to Irish companies, accounting for 69% of quarterly take-up between them while there were 8 transactions to US companies, accounting for a further 20% of leasing activity in the quarter. Meanwhile, there were 4 lettings to UK companies signed in the third quarter 2019.
CBRE say that demand for office accommodation currently stands at a healthy 388,600m2 with 56% of requirements at the end of the third quarter 2019 specifically focussed on Dublin city centre. According to CBRE Research, there are currently 32 office schemes under construction in Dublin city centre extending to almost 435,000m2 between them, of which 45% has already been pre-let. Meanwhile, CBRE say that almost three quarters of office stock delivered already in 2019 or due for delivery before year end, has already been let.
Lettings to financial sector tenants accounted for 30% of take-up in Dublin in the third quarter. The consumer services & leisure sector accounted for the next largest proportion of office take-up in Dublin in the third quarter (20%), while the public sector and the business services sector accounted for 15% and 12% of leasing activity in Dublin in the third quarter 2019 respectively. Technology companies accounted for only 11% of take-up in Dublin during the third quarter but 38% of take-up in Dublin in the year-to-date.
According to CBRE, there were two lettings to flexible office occupiers completed in Dublin in the third quarter 2019 with flexible occupiers accounting for 4% of total office take-up in the Irish capital in the year-to-date.
Commenting on the figures, Executive Director & Head of Research at CBRE Ireland, Marie Hunt said, "The Dublin office market continues to perform particularly well with 37 office transactions signed in the last three-month period and a large volume of transactions in legals, which has the potential to significantly boost take-up in the last three months of the year."
She added, "Interestingly, exactly half of all take-up achieved in Q3 2019 occurred in the suburbs of the city as occupiers increasingly move some of their operations to suburban locations. Indeed, the two largest transactions signed in Dublin in Q3 were located in the south suburbs of the city. Supply remains very controlled and with occupier demand remaining robust, investor appetite for office buildings remains strong."