Dublin office rents up yet again
Prime office rents in Dublin rose at one of the fastest rates in Europe between April and June this year, in a sign that the market is showing practically no signs of slowing down at this stage.
According to CBRE's second quarter review of the commercial property market in Europe, Dublin office rents rose 5pc during the period.
That put it alongside Barcelona as one of the fastest climbers during Q2. Rents in central Dublin have almost doubled in the last two years, as a dearth of high quality office space in the central business district has driven rates up sharply.
There are now numerous office refurbishment projects taking place around the capital at present, but new construction is still lacking as developers struggle to put together adequate financing.
The increase in rents continues to put pressure on yields in the Dublin market as well.
CBRE's senior director for EMEA research Richard Holberton commented: "There has been some recent volatility in European bond yields associated with concerns over Greece and the perception of a possible knock-on effect for a small number of countries in the region.
"Despite this, spreads between bond and real estate yields remain at very high levels, as does investment demand for real estate, so we expect the downward pressure on prime yields to persist. Evidence of rental momentum, remains limited but is expected to become more widespread over the coming months".