Rents for prime offices are on the rise in Limerick
THE level of office lettings in Limerick and Shannon this year looks set to more than double those of last year as office rents are also on the rise in the Treaty City.
These are among the trends identified in the latest Limerick office market report from property consultants Cushman & Wakefield.
Prime rents for newly built offices now achieve €350 per sq m which is an increase of €25 per sq m compared to those in the first quarter of the year, and close to similar levels in Cork city.
On the other hand, rents for existing offices average €215 per sq m. Prime office yields attain 6.25pc.
In the first half of the year, as much as 10,500 sq m of office space was taken. Furthermore, about 6,700 sq m of space was signed, indicating that take up should increase in the second half of the year and could exceed 17,200 sq m.
This is more than double the gross take-up of about 7,000 sq m in the whole of last year.
The largest deal, which dominated occupier activity in Q2 2019, was the movement of Jaguar into newly completed space. The floorplate of over 5,100 sq m is spread across four floors at Airport Avenue in the Shannon Free Zone near the airport to the west of the city.
Furthermore, about 6,700 sq m of space was signed at the end of Q2 2019, indicating take up should increase in the later half of the year. The majority of this space is located at the newly built Gardens International on Henry Street where Nordic Air has taken 3,700 sq m. It is being developed by Limerick 2030, a company set up by Limerick City and County Council.
At the end of June, availability in the Limerick office market sat at 52,550 sq m. This reflects an increase of 3pc on the same period last year, but is below the long run market average of 57,350 sq m.
Led in some part by the Gardens International, Grade A stock accounted for 51pc of available space in Q2 2019, down 2pc on the previous quarter. The city centre accounted for the majority of available space at the end of June 2019, 48pc, with the Shannon Free Zone and suburban regions accounting for 23pc and 28pc respectively.
However, with over 6,700 sq m or 13pc of available space currently signed, and a further 5pc of space reserved, net availability stood at 43,000 sq m at the end of June. Such a healthy pipeline for take-up will reduce the net vacancy rate to 12pc.
About 9,850 sq m of offices were under construction at the end of June and these are located in two developments at the National Technology Park and are expected to be completed this year.
One of the city's few Leed Gold-standard office developments is being undertaken by Fine Grain at the National Technology Park, Plassey, near University of Limerick. Known as Hawthorn House, it is due for completion in the near future.