80% of office lettings in Dublin during Q2 2012 were in Dublin 2/4
Dublin, July 6th 2012 – Property consultants CBRE today released their Dublin Office Bulletin for Q2 2012, containing their statistics on activity in the Dublin office market over the last 3 month period.
Office take-up of 30,743m2 was achieved in Dublin in Q2
36 individual office lettings signed in Dublin in Q2, 18 of which were to Irish tenants
The overall vacancy rate in the capital stands at 21.9% at the end of Q2 having decreased from 22.9% quarter-on-quarter
Vacancy rates in all districts of the city declined in the last three month period
Prime headline quoting rents in Dublin city centre stable at approximately €296 per square metre
No lettings of more than 4,645m2 (50,000 sq ft) signed in Dublin since Q3 2011
According to CBRE, a total of 30,743m2 of office lettings were signed in Dublin in the second quarter of 2012. Although this level of letting activity represents an increase of more than 21% compared to the most recent quarter, Q1 2012, it equates to an 11% decrease in letting activity in the capital compared to the same quarter last year. Heightened uncertainty about prospects for the Eurozone in recent months has had an impact on occupier activity, with some corporate occupiers postponing location decisions as a result. A number of occupiers who were potentially in the market for new office accommodation are being offered attractive terms by their landlords to remain in existing buildings, which is also affecting demand to some extent.
CBRE say that overall demand for office accommodation in the capital was down slightly quarter-on-quarter with approximately 175,000m2 of outstanding requirements at the end of Q2, compared with approximately 181,000m2 at the end of the previous quarter.
The most significant office lettings to sign in the capital during Q2 2012 include the letting of 3,205m2 to BSkyB at Burlington Plaza in Dublin 4; the letting of 3,112m2 to Merck Sharpe & Dohme in Red Oak North in the south suburbs and the letting of 2,508m2 to Irish Life and Permanent at Park Place in Dublin 2. There has also been some sales activity recorded in recent months. The extent to which office capital values have declined from peak and the lack of speculative development at present is encouraging some developers to purchase older office buildings for refurbishment on the basis that there will ultimately be a scarcity of quality office accommodation in prime locations.
According to Mark Smyth, Director in the Office Agency Department at CBRE, Ireland, “Prime rents in the Dublin office market at the end of Q2 2012 were approximately €296 per square metre. Rents are now stable at this level although there is likely to be further downward pressure on rents for non-prime buildings over the course of the year. The only instances where higher rents than €296 per square metre are being achieved are for a small number of relatively small sized lettings in prime buildings in Dublin 2/4”.
CBRE say that the overall vacancy rate in Dublin at the end of Q2 2012 was 21.9%, down from 22.9% last quarter with 790,000m2 of office accommodation being officially marketed to let in the Dublin market at the end of the second quarter of this year. The vacancy rate in all districts of the city decreased quarter-on-quarter, primarily as a result of no new stock being developed in the current climate.
There were 5 office investments completed in the capital during Q2. The total investment spend on offices in Dublin during the quarter was €79.55 million, bringing total investment spend on office properties in the capital in the first half of 2012 to €93.55 million.
24,584m2 or 80% of overall office take-up in Dublin in Q2 occurred in the city centre with the suburbs accounting for the remaining 20% or 6,159m2 of lettings signed in Dublin in the period.
18 of the 36 lettings signed in Dublin in the second quarter of 2012 were to Irish companies accounting for 11,764m2 or 37% of letting activity between them; 9 lettings totalling 9,685m2 were to US companies which accounted for 32% of office take-up in Dublin during Q2 while there were 3 lettings totalling 3,874m2 equating to 13% of Q2 take-up to companies from the UK. The remaining 18% of take-up in Q2 comprised 6 lettings to occupiers from other jurisdictions.
40% of the office take-up in Q2 comprised lettings of smaller than 929 m2 in size. 19% of the quantum of accommodation let in the period comprised lettings extending to between 929 m2 and 1,858m2 in size while the remaining 41% of the quantum of office accommodation let occurred in lettings of between 1,858m2 and 4,645m2 in size. There were no lettings of more than 4,645m2 (50,000 sq ft) signed in Dublin in the second quarter of the year – the third quarter this has been the case.
Tenants in the computers and high tech sector accounted for the greatest proportion of office lettings signed in Dublin during Q2 2012, accounting for 23% of lettings in the capital in the period. The business services sector accounted for 22% of letting activity in the period. Tenants in the manufacturing, industry and energy sector accounted for a further 22% of Q2 letting activity in the capital while the financial services sector accounted for 16% of lettings signed in Dublin during Q2. The public sector accounted for 11% of office take-up in Dublin during the second quarter of 2012.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 110 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie/ni.