Office take-up in Dublin predicted to rise as rents remain ‘competitive’

DUBLIN office take-up will likely hit 150,000 sq metres in 2011, with the struggling sector’s vacancy rate remaining above 20% for a third consecutive year, property consultancy Savills Ireland have said.

Office take-up in Dublin for the nine months to end-September hit 120,000 sq m, with prime locations accounting for about 60%, said Savills Ireland director of research Joan Henry.

“The outlook for the rest of 2011 remains positive in terms of occupier demand. We are forecasting that take-up will reach 150,000 sq m or better for the year and a further decline in the overall vacancy rate,” Ms Henry said. “Rents, however, are expected to remain competitive.”

Prime rents have fallen to about €300 per sq m a year in 2011, from about €350 in 2010. Rents on more volatile secondary offices have fallen to about €190-200 per sq m a year, from about €250 in 2010, Ms Henry said.

“What we are hoping is that with no developments (in the pipeline for 2011 or 2012) prime rents are near the bottom (of the down cycle),” Ms Henry told Reuters.

Dublin’s office take-up was 214,357 sq m in full-year 2008, but the onset of the global financial crisis sapped business confidence and savaged Ireland’s economy.

Thereafter, office take-up fell to 72,160 sq m in 2009 and 112,731 in 2010.