Commercial property consultants CBRE Ireland released their latest market report on the Dublin office sector for Q3 2015, focussing on trends and transactions in the Dublin office market in the first nine months of the year.
According to CBRE, 51,707 m² of office leasing transactions were signed in the Dublin market in the third quarter of 2015 in 54 individual transactions. This brings total take-up in the capital in the first nine months of the year to 173,713 m², which is an impressive result considering that annual average take-up in the capital is 167,000 m². Q3 take-up was boosted by the signing of two large lettings in excess of 4,645 m² (50,000 ft²) during the period, including a letting of 7,941 m² to Workday at King’s Building, Church Street, Dublin 7 in the Dublin 1/3/7 district and a pre-letting of 7,897 m² to Twitter at Cumberland House, Fenian Street, Dublin 2. 64% of office take-up in Q3 occurred in the city centre although CBRE say that rising rents and scarcity of supply in the city centre is driving increased activity and appetite for suburban offices over recent quarters.
Vacancy rates in Dublin fell again in Q3 2015 with the Grade A vacancy rate in Dublin 2/4 at approx.1.2% at the end of Q3, according to CBRE. Meanwhile, the overall rate of vacancy in Dublin is now 9.29%, the first time in 15 years it has been below 10%. This in turn is driving rental growth in the sector. Prime headline quoting rents have now risen to €565/m² (€52.50 ft²) and are clearly on course to reach €592/m² (€55 ft²) by year-end.
Dublin Office Take-up vs Vacancy 2005-Q3 2015
According to CBRE, tenants in the computer and high-tech sector accounted for 53% of office transactions signed in Dublin during Q3 2015 and 53% of lettings in the capital in the first nine months of 2015. Financial services tenants accounted for a further 14% of Q3 take-up while business services tenants accounted for 5% of leasing activity in Dublin in the last three month period. Six of the ten largest lettings completed in Dublin during Q3 were expansions while four were relocations.
Source: CBRE
