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Covid causes 30pc drop in Dublin office space lettings

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Demand: 76 Sir John Rogerson's Quay was let to Rabobank

Demand: 76 Sir John Rogerson's Quay was let to Rabobank

Demand: 76 Sir John Rogerson's Quay was let to Rabobank

Estimates for take-up of office space in the Dublin market last year range between 160,000 and 167,700 sq m. Agents Cushman & Wakefield say that the latter figure represents a decline of 30pc on 2019 levels.

Ronan Corbett, head of offices, at Cushman & Wakefield Ireland says that although activity and sentiment rose in final months, the follow through to signed deals remained slow.

“Just 28,450 sq m signed in the final quarter as further lockdowns and work from home policies continued to place little pressure on even expanding firms to immediately commit to space.“

Among the lettings during the quarter was the 2,183 sq m let by TIO at its 76 Sir John Rogerson’s Quay building to Rabobank.

By year end availability increased to 457,685 sq m reflecting an annual increase of 36pc and an overall vacancy rate of 11.7pc, or 8.6pc in the Central Business District.

At the beginning of 2021, there almost 394,800 sq m of space was under construction. Although 54pc of this is pre-let, a significant portion will hit the market in 2021 and 2022.

Marie Hunt, head of research at CBRE Ireland, said prime headline quoting rents in the city centre fell by 8pc to €645 per sq m (€60.00 per sq. ft.) over the year. On the other hand prime headline quoting rents in the suburbs remained stable at €317.42 per sq m at the end of Q4 in the south suburbs and at €226.00 per sq m and €193.68 per sq m respectively in the north and west suburbs.

Almost half of the 30 office transactions signed during Q4 were to Irish firms with four transactions to US companies, which between them accounted for 36pc of Q4 take-up.

For the year as a whole, 27 of the 105 lettings were to US companies which between them accounted for 68pc of annual take-up. There were 52 lettings to Irish companies, accounting for 23pc of annual take-up while 3pc of lettings in 2020 were to UK companies.

Ms Hunt reports a slight decline in terms of active requirements quarter-on-quarter with overall demand standing at 231,610 sq m at the end of Q4 - down 2pc on the previous quarter and down from a record 430,000 sq m at the beginning of 2020. She attributes this to occupier uncertainty.

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