Dublin office vacancy rate may jump to 27pc
Dublin’s office vacancy rate rose to the highest in at least 18 years in the second quarter and may jump to 27pc in 2010 as new buildings are completed during the recession, according to CB Richard Ellis Group.
The vacancy rate rose to 21pc at the end of the second quarter from 12pc a year earlier, CB Richard Ellis, the world’s largest real-estate broker, said in a report.
Developers are constructing 169,000 square meters (1.8m square feet) of offices that are due to be ready by the end of 2010, the Los Angeles-based company said.
“It’s scary stuff,” said Patrick Koucheravy, an economist in CBRE’s Dublin office, in an interview yesterday. “It’s not a pretty picture in the near term; tenants are in a strong position.”
The economy will probably shrink 8.3pc this year compared with a 4.6pc contraction in the euro area, according to the Central Bank.
The vacancy rate at the end of the second quarter was the highest since CB Richard Ellis started compiling data in 1991. Dublin had 718,000 square meters of empty office space at June 30, with tenants looking for 75,000 square meters.
In addition to buildings already under construction, developers have consented to build another 126,000 square meters of space by the end of 2010, the broker said.
The amount of space being built and which will be finished next year is less than half of the developments originally scheduled.
CB Richard Ellis estimates that a total of 171,000 square meters of office projects in the city centre have been delayed.
“The good news is that many developments are being put on hold,” said Koucheravy. “The bad news is that people are still trying to bring new schemes forward.”
Occupiers led by public-sector agencies and business services leased 23,200 square meters of office space in the second quarter, 30pc less than a year earlier, CB Richard Ellis said.