BUSY THIRD QUARTER IN THE DUBLIN OFFICE MARKET
Dublin, 13th October 2016 – Commercial property consultants CBRE Ireland have released statistics on the volume of leasing activity in the Dublin office market in the third quarter of 2016, which clearly shows that the market continues to perform well. According to CBRE, 82,736m2 of office leasing transactions were signed in the Dublin market in the third quarter of 2016, bringing take-up in the first nine months of 2016 to 172,377m2 in 198 individual leasing transactions. Take-up in the third quarter was the highest volume of Q3 take-up achieved in Dublin since Q3 2007.
The volume of office take-up signed in Dublin during the last three months alone is only slightly less than volume of take-up recorded in the previous two quarters combined with several sizeable transactions having signed in the third quarter of the year. Indeed, there were 4 lettings in excess of 4,645m2 (50,000 sq. ft.) signed in Dublin in Q3. The annual average volume of take-up in the Dublin office market over the last 10 years is 175,000 square metres per annum, meaning a year’s take-up has occurred in the capital in the first nine months of 2016 alone.
Tenants in the computer and high-tech sector accounted for 33% of office transactions signed in Dublin during Q3 2016 and 29% of overall take-up in the first nine months of the year. Financial services tenants accounted for 8% of Q3 take-up and 14% of take-up in the year-to-date while business services tenants accounted for 25% of leasing activity in Dublin in the last three month period and 17% of leasing in the capital in the first nine months of the year. 6 of the ten largest lettings completed in Dublin during Q3 2016 were expansions while 4 were relocations. According to CBRE, vacancy rates in Dublin fell in Q3 2016 with the Grade A office vacancy rate in Dublin 2/4 at approximately 2.1% at the end of Q3. Meanwhile, the overall rate of office vacancy in Dublin is now 7.62%.
Prime rents in the city centre are now in the order of €645 per square metre (€60 per sq. ft.), up from €546 per square metre in Q3 2015. Meanwhile, prime headline quoting rents in the south suburbs remain stable at approximately €296 per m2 (€27.50 per sq. ft.) at the end of Q2 while rents in the north and west suburbs have risen quarter-on-quarter to €172 per square metre and €161 per square metre respectively at the end of the third quarter.
Of the total investment spend of €3.18 million in the first nine months of 2016, 34% of the total comprised office properties specifically. Prime office yields in Dublin remain stable at approximately 4.65% at the end of Q3 2016.
There has been an increase in the number of enquiries from potential occupiers looking at the feasibility of locating some operations in Dublin following the surprise Brexit referendum result on June 23rd. Most of these enquiries are still quite preliminary scoping exercises with any increase in transactional activity emanating purely as a result of Brexit unlikely to materialise in the short term. Potential occupiers are comforted by visibility on future office supply in the capital considering the number of office schemes that are currently under construction or at various stages of the planning process which can be delivered if required. At the end of Q3, there were 29 office schemes under construction in the city extending to more than 372,000m2 between them. 23% of this stock has already been pre-let”.
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.