100,000sqm office lettings ahead of last year
Dublin landlords are expected to achieve up to 100,000 sqm of office lettings this year with about 70,000 sqm of space let so far this year.
The full year figure is well ahead of last year though still some way off the long-term average of 170,000 sqm take-up per annum.
Two agents CB Richard Ellis and HWBC concur that prime city centre rents are stabilising at around €376 per sqm. While CB Richard Ellis estimate that suburban rents range between €151 per sqm in the west suburbs to €183 per sqm in the south suburbs, HWBC says the suburban rents range between €130 to €200 per sqm. HWBC adds that secondary city centre rents range between €190 and €270 per sqm.
The Gallagher family's East Point business park is proving a major magnet for occupiers with Google taking 3,857 sqm, Yahoo taking 3,659 sqm and Citrix taking 2,286 sqm.
"The top five lettings this year were to US multinationals," says Paul Scannell of HWBC.
On the other hand Willie Dowling of CBRE says the vast majority of letting activity is emanating from indigenous occupiers who are relocating to new office buildings and attempting to re-let their previous premises.
"Despite good levels of activity in this sector, the existing overhang of office space in the capital will be slow to erode until more international requirements emerge and more net absorption is achieved," he adds.
"Considering the level of active requirements for office accommodation in the capital (many of which remain confidential), we are confident of good levels of letting activity being achieved in this sector over the coming months. We expect much of this activity will be focussed on core city centre locations despite the relative value on offer in the suburbs," Mr Dowling continued.
He also says that many of the deals are short-term lettings and rents remain under some pressure although there is clear evidence that prime rents for new office buildings in core locations have stabilised at current levels. "Tenants remain in a very strong bargaining position and continue to negotiate very attractive terms and conditions from landlords who are anxious to generate rent roll," he adds.
Mr Scannell says the vacancy rate reached 23.7pc mid year and is still rising but at a slower rate as the last of the speculative new office developments are reaching completion.