Rents stabilise in Cork, Limerick and Galway
The office markets in Cork and Limerick witnessed improved demand during the three months to the end of September but activity was subdued in the Galway market.
These are among the latest findings from DTZ Sherry FitzGerald's latest regional office-market survey which also shows that rents in all three cities have stabilised.
Cork office activity was boosted when Eli Lilly took 2,400sqm of offices in Eastgate Avenue, bringing Cork's take-up for the quarter to 4,700sqm.
However, the number of lettings declined relative to the previous quarter, owing partially to seasonal factors.
Over the 12 months Cork take-up reached 14,250sqm. Nevertheless vacancy levels at 118,750sqm account for 23.5pc of office stock.
Rents range from €235 to €270 per sqm for modern offices in the city centre and €130 to €170 per sqm in the suburbs.
In Galway only 1,600sqm of space was taken in Q3 and DTZ attributes this to seasonal factors. Take-up during the 12 months at 7,200sqm was still 59pc ahead of levels attained during the previous corresponding period.
Furthermore local agent Aidan Gavin expects overall take-up for 2010 to increase by 50pc.
Anecdotal evidence suggests that sentiment has improved, although prospective tenants remain cautious.
Galway rents range between €161 to €215 per sqm in the city centre and average €129 per sqm in the suburbs.
Limerick take-up improved significantly to 2,550sqm in Q3, of which about 1,500sqm was taken by Aercap in Westpark, Shannon.
This brought the 12-month take-up to 12,500sqm -- more than double the comparable level recorded 12 months previously.
"That said, current activity is considerably lower when compared to the long-run average," says Ciara McCarthy of DTZSF Limerick.
"Enquiry levels remain robust but potential occupiers continue to be aggressive in their proposals, incorporating increased rent-free periods, fit-out packages and flexible-lease terms," she adds.
Rents remained unchanged, ranging from €107 to €172 per sqm, in Limerick City centre, and between €107-€161 in Limerick's suburbs, including Shannon.
While quality of buildings and locations are key factors on rents, a lack of transactions makes it more difficult to gauge values.