Annual Average Office Take-Up Exceeded In Dublin In The First Nine Months Of 2015
Vacancy Rate Now at 15 Year Low
Dublin, 8th October 2015 – Commercial property consultants CBRE Ireland today 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, 51,707m2 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 173,713m2, which is an impressive result considering that annual average take-up in the capital is 167,000m2. Q3 take-up was boosted by the signing of two large lettings in excess of 4,645m2 (50,000 sq. ft.) during the period, including a letting of 7,941m2 to Workday at King’s Building, Church Street, Dublin 7 in the Dublin 1/3/7 district and a pre-letting of 7,897m2 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 approximately 1.20% 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 per square metre (€52.50 per sq. ft.) and are clearly on course to reach €592 per square metre (€55 per square foot) by year-end.
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. 6 of the ten largest lettings completed in Dublin during Q3 were expansions while 4 were relocations.
“There are now 19 office schemes under construction in the capital. Six of these schemes have already been pre-let while the accommodation in the 13 other schemes combined equates to less than 65% of a typical years take-up in Dublin. There has been considerable activity in the development sector over recent months with several new office schemes entering the planning process, some schemes having been granted planning and others commencing construction. This has led some commentators to suggest that there is potential for oversupply in the Dublin market after 2018. If every scheme that is currently in the planning process were to commence construction at the same time, this is certainly a threat. However, delivery dates of new schemes will depend on the pace at which schemes progress through the planning process and their ability to obtain development funding. The likelihood is that many financial institutions will refuse to release development funding until such time as pre-lettings have been agreed in advance which will obviously delay commencement and delivery dates considerably and ensure that supply comes on stream at a controlled pace. It will be 2017 before there is any meaningful improvement in supply which in turn will see prime rents in the Central Business District continuing to rise in 2016”.
- Click here to view the full report
CBRE MarketView | Dublin Offices Q3 2015
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 and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. 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 165 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, business rates and compulsory purchase, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie/ni.