| Demand for Dublin office space rises |
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| Demand for office space in Dublin soared in 2004, rising 21 per cent on the year, marking the best performance of the market since the boom year of 1998, according to a report from Jones Lang LaSalle. |
GGross take-up of office space in Dublin in 2004 reached 193,061 m2. The report, by Dr Clare Eriksson, head of research, Jones Lang LaSalle Dublin, noted that 57 per cent of this take-up was in the three central postal districts 1, 2 and 4, with the always-favoured Dublin 2 area leading the way with just over one-third of the total.
This take-up reflects almost precisely the distribution of completed office stock in Dublin: Dublin 2 accounts for 32 per cent of the 2,560,779 m2 total market, and the central area as a whole accounts for 54 per cent. Some 79 per cent (56,729 m2 ) of all new space in 2004 was constructed in the city centre.
In the suburban office market, which covers seven distinct locations, the area that recorded the highest take-up levels for 2004 was the South East region. This stretches from Donnybrook out to Cherrywood, and had 10 per cent of the year’s overall total.
Almost two-thirds of the entire take-up was accounted for by two business sectors - business services at 45 per cent - led by IT companies and legal businesses - and finance at 17 per cent - led by banks, finance, insurance and pension companies.
IT companies alone accounted for fully one-fifth of all the space taken up in the Dublin market last year. They were followed in the league table by legal firms, with 15 per cent of take-up, and banks, with 9 per cent.
At the other end of the scale, despite all the talk about decentralisation, the public sector is still a net taker of office space in the Dublin market. During the year the Office of Public Works absorbed 7,622 m2 of space (or close to 4 per cent of the total), more than half of it in the final quarter of the year.
The volume of vacant corporate space in the Dublin office market fell at a moderate but steady pace throughout 2004, a positive indicator for the performance of the market in 2005. In the last quarter of the year, 25 per cent of all available space was surplus. However, as 2004 progressed take-up of developer stock increased from 71 per cent in the first quarter to 84 per cent in the fourth quarter.
With take-up increasing by 21 per cent and completions declining by 16 per cent compared to 2003, the year saw a modest tightening in the vacancy rate for completed stock – down from 17.3 per cent at the beginning of the year to 16.6 per cent at the end. When vacant stock under construction is included, the overall Dublin office vacancy rate at the end of 2004 was 21 per cent.
However, the report stressed that these overall figures masked two quite different pictures that occur in the city centre and in the suburbs as vacancy rates vary greatly between the two areas. For example, in the fourth quarter, 2004 vacancy rates in Dublin 2 were only 9 per cent, compared to 16 per cent in the M50 North area and 27 per cent for all the suburban areas taken together.
At the end of 2004, some 224,834 m2 of office space was under construction, more than double the amount at the beginning of the year. Half of this was in Dublin 2, and four-fifths in the city centre area. Of the total under construction, 31 per cent is pre-let; this rises to 53 per cent in Dublin 2.
image id=856Further down the supply pipeline, planning permission has been granted for a further 844,461 m2 of office space in the Dublin area. However, the overwhelming majority (around 63 per cent) of this planned place is outside the central city area. |
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| Article appeared in the March 2005 issue.
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