Dublin office rents to soar 30%

Price increases in the Dublin office market show no sign of slowing but are instead likely to climb another 30% by the end of the next year.

A major shortfall in available office space will continue to fuel rental increases in the capital as the economy picks up and more foreign direct investment comes to our shores, according to property firm HWBC.

HWBC’s office market review is published today. It says prime Dublin office rents will climb by a further 20% by the end of 2015 with 9% growth predicted for the following year.

This follows a 30% rise last year with rents now at €45 per square foot.

“The simple fact is that the economy is improving, further foreign investment is coming to Dublin and yet we have no new office supply. As occupiers compete to lease the best locations it is inevitable that rents will continue to be driven higher,” HWBC investment director, Tony Waters said.

“We are forecasting 20% rental growth this year, with some moderation in 2016 as new schemes start to come on stream. The success of the IDA in attracting foreign direct investment clients and expansion of existing companies like Twitter and Facebook is playing a major role in driving the market higher, he said.”

HWBC’s report shows that there is just 45,000sq m of office space under construction relative to a total take-up of 220,000sq m in 2014. The former Canada House on St Stephen’s Green will provide 6,000sq m and the former Bank of Ireland building on Baggot Street will provide up to 20,000sq m on a phased basis, but there will not be enough to bridge the supply gap in 2015.