NONE of the office space that's earmarked for completion in Dublin's city centre during the second half of this year has been pre-let to clients and less than 18pc of the space built during the second quarter of this year was pre-let.
The figures released by estate agent Lisney suggest a sharp reversal is occurring in the fortunes of the country's commercial property developers.
They also reveal that the northern suburbs of the capital are fairing badly, with none of the office space there due for completion in the second-half of the year being pre-let either.
Altogether in the entire Dublin area, less than 11pc of office space due for completion in the latter half of 2008 has been pre-let. Lisney said office rents fell in the first quarter of this year for the first time since 2003, and early indications are that this trend has continued into the second quarter.
"Given the supply/demand imbalance, we do not forecast any widespread recovery in rents this year," said the company. That's likely to put pressure on some developers who are already juggling the demands of bank loan repayments with the prospect of being unable to find tenants for new office builds.
An estimated 159,000 square metres of new office space was built in the first half of this year in Dublin, while a further 202,000 square metres of space is due for completion this year in the capital. That will bring the total amount of new office space coming on stream this year in Dublin to 361,000 square metres -- 14.5pc more than the record number of completions achieved in 2001. Some large corporations, mainly multinationals, have been seeking additional office space within the capital, but vacancy rates have also begun to rise significantly as new office space hits the market.
Lisney reckons that office vacancy rates across the greater Dublin area have risen from 10.2pc earlier this year to 11.7pc, which has caused rents to fall.
Vacancy rates in the city centre are currently running at just under 9pc, but in the northern suburbs the figure is 20pc, with almost 26,000 square metres of speculatively-built office space due for completion in that area this year.
Irish financial institutions have so far largely taken a softly, softly approach to developers who have been encountering fiscal strain, but at some point it's likely the banks will have to begin taking a harder line in coming months.
The deterioration of the Dublin office market could add significantly to the banks' difficulties, which means the financial institutions could be forced to begin shouldering impairments as conditions fail to show any signs of a short-term recovery.