Firms holding off on growth, relocation plans

BUSINESSES are putting expansion and relocation plans on hold until the economic downturn passes.

A report on the European office market by CB Richard Ellis (CBRE) found activity in the Dublin office market has remained relatively robust in the first half of the year.

But it does note that take-up in the second half of the year will be weaker as a result of potential office occupiers starting to put future expansion and relocation decisions on hold until such time as economic prospects are clearer.

Director of research at CBRE, Marie Hunt said: “The Dublin office market performed surprisingly well in the first half of 2008 with almost 80,000 metres squared of lettings signed.

“It is however not surprising that sentiment has deteriorated in recent months as a direct consequence of weakening economic conditions, both global and domestic.”

Take-up in the Dublin market is still likely to reach an impressive 200,000 metres squared this year which is on par with the 10-year average for the Dublin market but masks a slowdown in the quantum of transactions being negotiated, according to the report.

“The most tangible sign of the downturn in occupier demand... is the fact that lease negotiations have become very protracted,” she said.

According to the report, office take-up across the major European markets is running about 20% below last year’s levels.

It said weaker leasing activity reflects the uncertain economic environment and lower business confidence.