Office vacancy rates fall for first time in 2 years

VACANCY rates in the Dublin office market have fallen for the first time in two years, with experts saying a two-tiered system is emerging with prime locations in more demand.

The latest market review from property consultants CB Richard Ellis found that in the first quarter of 2010 office take-up continued to rise and the supply pipeline remained constrained.

CB Richard Ellis said there is real potential for a two-tiered market to emerge in Dublin, with rents for prime modern accommodation in the best locations starting to edge upwards while rents for secondary accommodation remain under further downward pressure.

The Dublin office vacancy rate fell from 23.45% to 23% in the period but the vacancy rates remains high compared to other European markets, according to CB Richard Ellis.

The Dublin office market saw nearly 25,000 square metres of take-up during Q1 2010, a quarterly increase of 26%. This compares with the first quarter of last year, when this sector bottomed and take-up reached just more than 10,284 sq m.

Director of office agency at CB Richard Ellis Willie Dowling said: “We expect take-up this year to be at least at the level seen last year – around 78,000 sq m.”

Property economist with CB Richard Ellis Patrick Koucheravy said the reduction in the vacancy rate is because occupiers are exercising break options, leaving older stock behind and moving into new.