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Strong pick-up for Dublin offices due in third quarter

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New delivery: 45 Mespil Road, Dublin 4 – Amyrt Pharma took 8,200 sq ft at the property

New delivery: 45 Mespil Road, Dublin 4 – Amyrt Pharma took 8,200 sq ft at the property

New delivery: 45 Mespil Road, Dublin 4 – Amyrt Pharma took 8,200 sq ft at the property

Covid-19 curtailed Dublin's office market in the second quarter of the year with just 83,000 sq ft of space being taken up by occupiers.

This compares with 817,000 sq ft in Q1 and brings total take-up at the midway point of the year to 900,000 sq ft, just over half the level witnessed in the same period in 2019, according to research by real estate firm Knight Frank.

Jim O'Reilly, director at Knight Frank, said: "We expect to see some improvement in deal levels in Q3, with a number of significant transactions due to sign over the coming weeks. Take-up levels in 2020 will be well back on previous years, but 2021 will be a better year for sure."

He says there are still significant enquiries in the market which he expects to see advance before the end of the year. However he says that these potential deals may not be finalised until 2021.

While recognising the economic uncertainty, he expects Dublin to benefit from the dominance of the tech sector which has performed relatively well through the lockdown.

Indeed, several deals that would have completed in Q2 are now due to sign in early Q3. This will ensure a strong start to the second half of the year. In total, more than 800,000 sq ft is reserved.

In terms of rental impact, Mr O'Reilly expects a softening of incentives rather than headline rents due to the tight supply landscape - with 46pc of this year's and 47pc of next year's development pipeline already pre-let.

The largest transaction of Q2 was the pre-letting of 23,900 sq ft at Hibernia Reit's 2 Cumberland Place by 3M Digital Science Community, a subsidiary of technology giant 3M.

Amyrt Pharma took 8,200 sq ft at Davy's newly delivered 45 Mespil Road.

Unity Technologies took 7,600 sq ft at IPUT's 33 Sir John Rogerson's Quay by sub-letting the space from the existing tenant, Dillon Eustace.

Among deals done by financial and professional services firms were asset manager Vanguard's take-up of 6,200 sq ft at George's Quay Plaza.

International law firm Dentons sub-let 4,200 sq ft from Nuritas at Joshua House.

The second quarter saw only 127,000 sq ft of new offices delivered.

The largest is DAA's Two Dublin Airport Central with 117,000 sq ft. Nearby is B&C Contractors' completed Block B, Dublin Airport Business Park with 10,000 sq ft.

Irish Independent