Dublin office rents will climb nearly a third in two years
Rent for office space in prime Dublin will climb by 20pc this year and a further 9pc in 2016, according to a review by property group HWBC.
This follows a massive 30pc rise in 2014, its study found.
The rapid and continuing growth in rents is due to the fact that no new offices have been built in the past five years and there will be no significant completions in Dublin until well into 2016, HWBC said.
A similar jump was evident in the rental value of car parking spaces, with a city space now yielding an estimated €3,000 per year - an increase of 9pc on last year. This is expected to rise a further 17pc in 2015.
"The simple fact is that the economy is improving, further foreign investment is coming to Dublin and yet we have no new office supply," said HWBC investment director Tony Waters. "As occupiers compete to lease the best locations it is inevitable that rents will continue to be driven higher. The success of the IDA in attracting new foreign investors and the expansion of existing companies like Twitter and Facebook is playing a major role in driving the market higher.
"It is a good problem to have, but what we need now is further investment in development so that demand can be catered for at reasonable rent levels."
There is just 45,000 square metres of office space under construction even though 220,000 square metres was required in 2014, HWBC found.
The former Canada House on St Stephen's Green and the former Bank of Ireland building on Baggot Street will both become available this year but this will not be enough to bridge the "supply gap", it said.