Friday 24 February 2017

Office rents to keep rising until new supply in 2017

Peter Flanagan

Peter Flanagan

Grand Canal Dock commands some of the highest rents in Dublin
Grand Canal Dock commands some of the highest rents in Dublin

Office rents in central Dublin stand at €52.50 a square foot and are unlikely to fall back before 2017, according to CBRE.

In its bi-monthly look at the market, CBRE said that although there are now a total of 19 office schemes under construction in Dublin, the new accommodation these schemes will provide amounts to just over one year's annual average takeup and approximately 45pc of this new accommodation is already committed.

The office market has been rising steadily for the last two years and are forecast by some analysts to go as high as €70 per square foot, matching the height of the Celtic Tiger years, as long as demand continues to outstrip supply.

The lag between demand and when new buildings will come on stream will continue to push up rents for now, said CBRE.

The firm noted there has been "considerable activity in the development sector over recent months with several new schemes entering the planning process and others commencing construction".

Many of the requirements at present though are relatively small, especially in the 5,000 sq ft to 15,000 sq ft space.

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