One year's take-up of offices in nine months
Published 09/10/2015 | 02:30
Companies took up more office space in Dublin in the first nine months of 2015 than would be expected normally to take up over an entire year, new statistics show.
Data from CBRE shows that 51,707 sq m of office leasing transactions were signed in Dublin between July and September.
That brought the total take-up in the capital in the first nine months of the year to 173,713 sq m. That is already ahead of annual take-up in the capital, which averages at 167,000 sq m per year.
The increase in take-up has pushed vacancy rates in the most desirable areas of the capital down to effectively zero.
The Grade A vacancy rate in Dublin 2 and Dublin 4 was approximately 1.2pc at the end of Q3, claimed CBRE.
Meanwhile, the overall rate of vacancy in Dublin is now 9.29pc. That is the first time in 15 years it has been below 10pc.
Inevitably, this in turn is driving rental growth, with prime headline quoting rents standing at €565 per sq m, or €52.50 per sq ft.
It is widely expected now that rents will top €592 per sq m, or €55 per sq ft by the end of this year.
The property broker claims the rate of lettings in the third quarter was boosted sharply by two large deals that were signed during the period.
US tech firm Workday has agreed to take up more than 7,000 sq m at King's Building on Church Street in Dublin 7, while Twitter has agreed terms to move to Cumberland House in Dublin 2 where it has signed on for close to 8,000 sq m.
Twitter will move there next year after an extensive refurbishment of the property, which is owned by Hibernia Reit.
Perhaps unsurprisingly, just under two-thirds of the space that was taken was in the city centre.
Despite the fact that some companies are clearly finding space in parts of the city centre, CBRE echoed other industry players that rising rents and scarcity of supply in the city centre is driving increased activity and appetite for suburban offices over recent quarters.
The firms head of research Marie Hunt commented: "There has been considerable activity in the development sector over recent months with several new office schemes entering the planning process, some schemes having been granted planning and others commencing construction.
"This has led some commentators to suggest that there is potential for oversupply in the Dublin market after 2018," Ms Hunt said.
"If every scheme that is currently in the planning process were to commence construction at the same time, this is certainly a threat. However, delivery dates of new schemes will depend on the pace at which schemes progress through the planning".