Saturday 25 November 2017

Demand for Dublin offices keeps growing as rents near boom level

Office rents in prime areas of the capital are likely to top €65 per sq ft this year – the boom-era peak was €70 per sq ft. Photo: Bloomberg
Office rents in prime areas of the capital are likely to top €65 per sq ft this year – the boom-era peak was €70 per sq ft. Photo: Bloomberg
Peter Flanagan

Peter Flanagan

There is no end in sight for the spike in office rents, with levels in Dublin likely to top €65 per sq ft before the end of this year.

Broker JLL has become the latest big player in the commercial market to contend that office rents for the top areas of Dublin will keep rising this year, as demand continues to outstrip supply in the capital.

In its outlook for 2016, JLL believes that in Dublin city centre, headline office rents are set to rise €65 per sq ft. That figure is just below the all-time high of €70 per sq ft set back during the Celtic Tiger years and matches research throughout the Dublin office market.

JLL however make clear that what strong growth there is will not take place indiscriminately.

Instead, the focus will be on selective parts of the capital and for high quality properties only.

The agents point to the changing demands of tenants which are making asset management much more difficult for property owners.

"Trends including globalisation, new office specification requirements, a resurgence of demand from Ireland and UK-based occupiers, the emergence of key fashion brands and the concept of 'protective expansion' in the retail sector," the agents said

"Landlords properly understanding tenant requirements is key. All of this is making asset management a more complex task, as investors seek to preserve and enhance value," JLL added.

The hotel market is "expected to continue its very strong performance in 2016", it said.

"Forced sellers are disappearing and willing sellers and hotel development are back," the firm said. "Supply shortages across the board are leading to a very lively land market, and site prices are expected to continue to rise in 2016."

Irish Independent

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