Capital’s office market demand starts to pick up

TAKE-UP in the Dublin office market, although down 30% on a yearly basis has begun to pick up, according to estate agents CB Richard Ellis.

Figures released by the estate agents found that although take-up more than doubled in the last quarter compared with the previous quarter it is still well below the five year quarterly average.

Vacancy rates jumped in the quarter to 21%, with city centre offices posting vacancy levels at 20%.

Due to several large lettings in the suburbs in recent months, Dublin city centre, which usually accounts for the greatest proportion of take-up each quarter, failed to account for the majority of office letting activity in the capital.

The city centre accounted for 9,850m² of take-up in the second quarter, with the Dublin 2/4 district accounting for 63% of take-up in the city centre.

CBRE said no pre-lettings were signed during the quarter, while 55% of lettings were in newly-completed buildings.

Goodbody analyst Marina Houghton said despite a significant amount of projects being put on ice so far in the face of current market conditions, and pending developments in NAMA, there still appears to be risk of oversupply in the market in the short to medium term, which could further impact vacancy and rental levels and thus yields and ultimately valuations.