A total of 52,442m² of office leasing activity in 50 individual lettings occured in the Irish capital during the first quarter of 2016, with more than three quarters of this letting activity occuring in the city centre.
Dublin Office Take-Up Q1 2011-Q1 2016
According to to CBRE Ireland’s latest Market View report, office take-up in the quarter was up more than 37% on the volume of leasing activity achieved in the capital in the same quarter last year. Q1 take-up was boosted by the signing of two large lettings in excess of 4,645m² during the period, namely a letting of 7,231m² to ESB at the Gateway building at East Wall Road in Dublin 3 and a letting of 6,271m² to Fidelity International at George’s Quay in Dublin 2.
According to Alan Moran, director in the office agency department at CBRE, tenants in the computer and high-tech sector accounted for 34% of office transactions signed in Dublin during Q1 2016. Financial services tenants accounted for 20% of Q1 take-up while business services tenants accounted for 7% of leasing activity in Dublin in the last three month period. Seven of the ten largest lettings completed in Dublin during Q1 2016 were expansions and two were relocations while only one of the ten largest office lettings in Dublin in the quarter was to a new entrant.
Vacancy rates in Dublin fell again in Q1 2016 with the grade-A vacancy rate in Dublin 2/4 at approximately 1.5% at the end of Q1. Meanwhile, the overall rate of vacancy in Dublin is now 7.7%. Prime headline quoting rents rose to €619/m2, up from €592/m2 at the beginning of the year.
According to Marie Hunt, executive director & head of research at CBRE Ireland: “Q1 has been very strong with an impressive volume of office leasing activity occuring in the capital and a significant volume of stock reserved, which bodes well for take-up in subsequent quarters. Availability remains constrained but stock is now more tangible for occupiers considering the volume of development that is currently underway and planned. Our research shows that at the end of Q1, there were 26 office schemes under construction in the capital, extending to almost 319,000m2 between them. 28% of this stock has already been pre-let. The remainder equates to less than the volume of take-up achieved in the Dublin market during 2015. Only 92,308m2 of office stock is due for completion in the capital in 2016 with more than half of this stock already committed”
CBRE say that prime office investment yields remained stable during the quarter at 4.65%. The total volume of office properties purchased for investment in Dublin in the quarter reached almost €348m.
