Office take-up spikes 37pc year-on-year during Q1
More than half a million square feet of office space was taken up in Dublin during the first three months of this year, as the Dublin market continued to take in more tenants.
Data from CBRE shows there were 50 office lettings in the capital between January and March, with three quarters of them taking place in the city centre.
According to the broker, office take-up in the quarter was up more than 37pc on the volume of leasing activity achieved in the capital in the same quarter last year.
Vacancy rates in Dublin fell again during the period.
According to CBRE, the vacancy rate for top quality grade A office space in Dublin 2 or Dublin 4 was approximately 1.5pc at the end of March. Given that most of the that space will be in difficult to fill parts of blocks or small portions of floors, that means the real vacancy rate in those areas is effectively zero.
Meanwhile, the overall rate of vacancy in Dublin is now 7.7pc.
Given the lack of available space at present, it is perhaps not surprising that prime headline quoting rents rose to €57.50 per sq ft (€619 per sq m), up from €55 per sq ft at the end of last year. Most experts expect rents to top €60 per sq ft by the end of this year, but after that a slew of new office buildings are expected to come on-line and their presence may see rents flatten out or even start to slide.
CBRE Ireland director of office agency Alan Moran said telecoms, media, and technology firms had led the way, taking up 34pc of all lettings in the year so far.
"Seven of the 10 largest lettings completed in Dublin during Q1 2016 were expansions, two were relocations while only one of the ten largest office lettings in Dublin in the quarter was to a new entrant," he said.
Company head of research Marie Hunt meanwhile said the strength of Q1 boded well for the rest of the year.
"The first quarter has been very strong with an impressive volume of office leasing activity occurring in the capital and a significant volume of stock reserved, which bodes well for take-up in subsequent quarters.
"Availability remains constrained but stock is now more tangible for occupiers considering the volume of development that is currently underway and planned," she said.
The first quarter numbers were boosted by major lettings including at the Gateway Building on East Wall Road on the city's north side, which will be used by ESB on a temporary basis while its current headquarters at Fitzwilliam Street is knocked down and rebuilt later this year.