Office rents in some Dublin city centre developments have fallen by more than 40pc from peak and now range from between €300 and €430 per sqm depending on the landlord, agent, terms and location.
Jones Lang La Salle estimates that headline prime rent in Dublin fell to €430 per sqm. HWBC says that they range between €300 and €375 per sqm, while another agent, CB Richard Ellis, reckons that prime headline city centre rents have settled at €376 per sqm.
HWBC says that some landlords are offering space at around €300 per sqm "with additional incentives available, which may represent an over correction as this level of return is not sustainable for prime space".
All agents noted how the reductions have improved the competitiveness of Dublin offices on an international level and how letting incentives such as extended rent-free periods, flexible leases and early break options have all been evident in the office transactions and are set to remain a feature of the market going forward.
Peter Stapleton of Lisney also noted that prospective tenants had shown increased interest in the Sandyford area of Dublin recently due to the type of space available, the attractive rents as well as its accessibility via Luas and the M50.
Fionnuala O'Buachalla, director of tenant representation at JLL, noted that a key trend in 2009 was increased levels of Foreign Direct Investment (FDI) into Dublin.
"This helped bolster the demand for office space and accounted for approximately 8pc of take-up during the year. Examples of the larger FDI lettings completed during 2009 include the 1,885sqm in Hanover Reach taken by Facebook; the 1,309sqm in One Kilmainham Square taken by Amazon, and the 649sqm taken by Bentley Systems in Europa House.
"FDI continues to be attracted to Ireland as a result of our low corporation tax, more competitive economic environment and large educated workforce, coupled with more competitive property choice and property terms that incorporate lower rental levels and increased incentives."
CB Richard Ellis said their research indicated that overall vacancy for the Dublin market moved to 23pc in Q4; the total vacant office stock in the Irish capital stood at over 820,00sqm as of the end of 2009. The disparity in vacancy between sub-markets remained obvious, however.
Most notably, vacancy in the south suburbs fell from 14.3pc to 13.7pc, while vacancy in Dublin 2/4 increased from 14.1pc to 17.2pc in the quarter, a direct result of the bulk of Q4 2009 development completions occurring there.