Take-Up In The Dublin Office Market In First Six Months Of 2011 Up 66% On The Same Period Last Year
Healthy Level of Letting Activity Continuing Despite Economic Backdrop
11th July 2011 | The Dublin office of CB Richard Ellis Group (“CBRE”), the international commercial real estate firm, today released their Dublin Office Market View Q2 2011 and revised upwards their estimate of take-up figures for the first half of 2011.
To download a PDF copy of the full CBRE I Dublin Office Markertview Report please see the link further below.
The property consultants said that letting activity in the Dublin office market reached 34,149m2 in the second quarter of the year bringing take-up for the first six months of 2011 to 83,596m2. This represents an increase of almost 66% on the same period last year, with Q2 take-up in the capital up almost 40% year-on-year.
Major office lettings signed in the last three months include:
The letting of 11,107m2 at Belfield Office Campus to Paddy Power
The letting of 1,323m2 at Kingswood Avenue, Citywest to SAP
The letting of 1,282m2 at The Arch, Blackrock Business Park to IPOS
The letting of 1,069m2 at The Oval, Shelbourne Road, Dublin 4 to Zynga Games
The letting of 1,044m2 at Lake Drive, Citywest to Helix Healthcare.
CB Richard Ellis’ report states that with no new office development under construction and take-up continuing at a healthy pace, the headline vacancy rate for Dublin offices fell marginally to 22.8% in Q2 2011. Vacancy fell in Dublin 2/4 and the south suburbs as well; vacancy fell slightly to 17.3% in Dublin 2/4 and 14.5% in the south suburbs. CBRE’s research indicates that 72% of Dublin’s vacant stock at the end of Q2 2011 was deemed to be Grade A stock, but almost half (48%) of this Grade A vacant stock is located outside of the city centre and spread throughout the suburban markets. Much of the vacant stock comprises floors in otherwise occupied buildings with few fully vacant office buildings available.
Of the 51 office lettings signed in Dublin in Q2 2011, 32 of them were located in the city centre. The city centre accounted for 24,101m2 or 71% of overall take-up in Q2 while the suburban office market accounted for the remaining 4,795m2 or 29% of letting activity in Dublin in the period. There were a number of large lettings but the bulk of transactions in the period comprised relatively small lettings.
CB Richard Ellis has again revised their rental series downwards. Willie Dowling, Head of Office Agency, said, “Despite falling vacancy and a lack of new office development in recent months, intense competition from tenants led to prime headline rents for Dublin offices coming under renewed pressure in Q2 2011, falling to €323 per square metre from €345 per square metre. This quarterly decline means that prime headline rents in the Irish capital have now fallen 52% from their peak in 2007”.
Commenting on the level of demand in the office market at present, Darren Nugent, Director in the Office Agency team at CB Richard Ellis said “Encouragingly, there are number of significant requirements for office accommodation in the capital. A number of very significant office enquiries including requirements from CITI, the Central Bank and BNY Mellon have yet to be fulfilled, which bodes well for take-up in the Dublin office market in the second half of 2011. However, once many of these requirements have been catered for, there is little visibility on where the next wave of demand for office accommodation in the capital will come from”.
The Dublin Office Market View Q2 2011 also notes that only one investment transaction signed in the second quarter of the year, bringing total spending on office investments to just less than €150 million in the first six months of 2011. CB Richard Ellis also say in the report that, in light of continuing uncertainty with regards to proposed Government legislation on upward-only rent reviews, they have revised their prime office yield series upwards to 7.5%.
About CB Richard Ellis
CB Richard Ellis 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 2010 revenue). The Company has approximately 31,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CB Richard Ellis 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 Web site at www.cbre.com
In Ireland, with offices in Dublin and Belfast, CB Richard Ellis is the country’s largest commercial real estate services company, now employing over 140 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, project management, consultancy, valuations and research. CB Richard Ellis Ireland has been listed among the Best Workplaces in Ireland, 2011, for the seventh year running. Please visit our website at www.cbre.ie or www.cbre.ie/ni