Scarcity of big offices curtails Galway market
A shortage of large office floor plates in Galway city is curtailing activity in the Galway market.
However, one company has addressed the issue by converting an industrial unit to meet its requirements. Nevertheless, when smaller and older office space is taken into account, the vacancy rate stood at 13.1pc at the end of September, according to the latest DTZ Sherry FitzGerald (DTZSF) market report.
With 1,800sqm of space taken up in the third quarter of this year, this brought to 7,350sqm the volume of space transacted in the 12 months to the end of September.
"Activity in the market continues to reflect significant fluctuations in take up due to a small number of large deals skewing take-up, particularly when activity remains significantly lower than the long-run average," says Aidan Gavin of DTZSF.
He describes enquiry levels as robust with a continued improvement in active requirements.
"This is illustrated not only in the decision by BioWare, a division of Electronic Arts (EA), to locate their European customer service and operations centre in Galway, but also in the significant number of other deals in the pipeline which will inevitably boost take-up in the coming quarters," he adds.
BioWare decided to locate in an industrial unit in Parkmore which is retrospectively being refitted to office standard because of the shortage of suitable office accommodation in Galway city centre.
The suburbs accounted for 88pc of take-up over the past 12 months and its market share continues to rise as shortages of good quality space continues to hamper demand in the city centre.
Nevertheless, prime headline rents remained stable in both the city centre and the suburban market during the third quarter at around €161 to €194 per sqm for third generation city centre accommodation and €107 to €129 for third generation suburban space. Landlords are also offering incentive packages as prospective tenants remain cautious and more aggressive in their quest for both competitive and flexible terms.
As a result deals are taking longer to close. The total quantity of available space in the Galway office market stood at 37,850sqm, broadly unchanged from the previous quarter.