JLL expects more growth ahead for the office market
PRIME office rents increased by more than 40pc last year as the Dublin office market soared back towards levels not seen in nearly a decade.
According to broker JLL, offce rents in the best parts Dublin jumped from €35 per square foot at the start of 2014 to close to €50 per sq ft by year - an increase of 43pc.
The report shows that there was just under 200,000 sq ft of new offices under construction in prime Dublin at the end of 2014 but that is still far below the level of construction that is needed to sustain the market at present. The vacancy rate fell almost by half to 10pc in the capital during the year but that number includes areas that are less attractive to foreign direct investment.
In places like the Dublin Docklands that vacancy rate falls sharply.
Of the grade A stock left in Dublin, around 29pc is newly built, while 7pc has been refurbished. Some 30pc is under construciton while 34pc is being refurbished.
The increased popularity of refurbished offices is likely to continue into 2015, as the time line to get an office block turned around and made availabel for occupation is much shorter than for new builds. As a result, refurbs are seen as a good "quick fix" to the shortage at present.
"Supply has further tightened, with the vacancy rate now at the lowest level ever recorded," said Ms Dwyer.
"After such a positive 2014, we expect that 2015 will continue to be another strong year for the sector," Ms Dwyer noted.
Rents should exceed €55 per square foot in 2015, she added.
Sunday Indo Business