Tech projects help stabilise office rents
Take-up of Dublin office space continues to lag behind last year's levels but agents are pleased at the level of transactions.
According to a Jones Lang LaSalle survey more than 29,700sqm of space was taken in Q3, bringing to 91,000 the take up for the year to date.
During the quarter there were 52 lettings with deal sizes averaging around 557sqm.
But as many as 80pc of all deals were for less than 930sqm.
"This reflects levels of demand mainly from foreign direct investment firms which are looking to establish in Ireland with short-term flexible office space for between 185 to 465sqm for the first year or two, pending their longer term growth plans.
Tech and media firms continue to drive take-up, accounting for about 25pc of deals in Q3 and the locations were split evenly between the city and suburbs.
Among the top transactions were: Capita -- 3,716sqm at 2 Grand Canal Square; Tullow Oil -- 22,325sqm at 1 Central Park, Dublin 18; Allianz World Care -- 1,976sqm at Park West, Dublin 12; JTI --1,486sqm at Riverwalk, Citywest Business Campus, Co Dublin and Chase Paymentech -- 1,366sqm at East Point, Dublin 3.
Fionnuala O'Buachalla of JLLS estimates latent demand for up to 140,000sqm in the market with companies such as Airtricity, AA, Novartis, Google and Vodafone all looking for accommodation.
"In addition there are a couple of potential confidential large requirements for the city centre looking at pre-letting opportunities," she adds.
However, while she estimates the vacancy rate for Dublin 2 is continuing to fall and now stands at just over 13pc, down from a high of almost 18pc for the same period in 2010, rival firm CB Richard Ellis points out that for the greater Dublin market the overall vacancy rate in the capital stands at 22.1pc having increased slightly from 21.9pc in Q2.
CBRE also points out that prime headline quoting rents in Dublin city centre have stabilised at about €296 per sqm for the third consecutive quarter.
JLLS says that prime suburban and city edge rents also remained unchanged in a range of €108 to €172 per sqm.