Dublin’s office market rolls into 2011 on a high

Savills reports increase in activity throughout 2010 with 80% increase in Q4 over Q1

Article posted: 02 Feb 2011

International real estate advisor, Savills, has reported that the pace of lettings activity in Dublin’s office market enjoyed a steady increase as 2010 progressed, particularly in Q4 which saw 473,612 sq ft of space let. In total 67 deals were completed in Q4, an almost 80% increase in the number of deals compared with Q1.

Overall 1.2m sq ft of office space in Dublin was let in 2010, compared with 775,001 sq ft in 2009 and the largest office deal of 2010 was a 107,639 sq ft lease renewal by Dell in Cherrywood.

Joan Henry, head of research at Savills Ireland, says: “In 2011 we expect that the office market will be able to sustain the level of letting activity that was achieved last year. We hold the view that 2009 was the bottom of the market in terms of activity, 2010 saw stabilisation and a pick up in lettings as the rental adjustments fed through.”

According to Savills, the pick up in lettings and subsequent rental adjustments, combined with the fact that the completion of new space is expected to reach only 129,166 sq ft in 2011, a drop from 742,709 sq ft in 2010, will see the amount of high-end quality space diminish. This, Savills says, could increase competition and rents for the remaining vacant Grade A stock available to the market in the prime city centre areas.

The current vacancy rate for the Dublin area is 23.6%, following an increase in all areas over the last year, with the exception of North and South suburbs. Newly completed buildings accounted for just under 50% of total vacancy but Savills expects prime office rents to remain stable.

According to Savills, Dublin continues to be a European hub for high value ICT and financial services jobs, making it an attractive location for multi-nationals. In Q4 of 2010 the financial services sector took 29% of the total space let, with both Facebook and Google taking prime offices in Dublin.

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Posted by Aree J Rand