Rise in office space take-up focuses on prime locations

Take-up of office space in Dublin rose by 25% during 2011, reaching twice the levels achieved in 2009.

Research undertaken by Savills Ireland found that take-up of office space in the capital was relatively consistent throughout 2011, with a total of 148,000 sq m let for the year as a whole.

The trend in terms of demand continues to be led by a preference from occupiers for space in prime locations, most notably Dublin 2 and Dublin 4. Of 53 deals completed in the fourth quarter, 25 were located in either Dublin 2 and Dublin 4.

Over 35% was in Dublin 2, totalling 20 separate deals. The largest deal was Eden College’s occupation of 3,000 sq m in Scotch House, on Hawkins Street, Dublin 2.

There were five deals signed in Dublin 4 in the last quarter, totalling just over 2,000 sq m, with three of these grade A spaces.

Savills Ireland noted that out-of-town letting activity was strong in the last quarter of 2011, with the southern suburbs making up 25% of the total space let in the quarter.

The largest deal in the southern suburbs was the letting of 3,200 sq m of space to Mastercard.

Financial services and the ICT sector drove demand in the southern suburbs, reflecting the proximity of office space in these locations to the prime locations and to good transport infrastructure.

Consistent demand across most locations, along with minimal completions (only 12,000 sq m were completed in 2011) has resulted in a drop in the overall level of vacancy from 23% at the end of 2010 to 21.6%.

Savills Ireland said that the level of interest in the Dublin office market is expected to continue in 2012. International telecoms, media and technology companies are expected to continue to look to both enter and expand their existing operations in Dublin.