CBRE Ireland today released figures for the volume of office leasing activity achieved in the Dublin market in the first six months of 2019, which shows that a total of 152,201 square metres of transactions were signed in the Dublin market in the first half of the year. Following the highest Q1 office take-up ever recorded in the Dublin market, the volume of transactional activity in Q2 was down in comparison, with only one transaction extending to more than 9,290m2 (100,000 sq. ft) signed in the last three-month period although several transactions are in legals and now not due to sign until the second half of the year.
According to Marie Hunt, Executive Director & Head of Research at CBRE Ireland, “The Dublin office market continues to perform well with 50 office transactions signed in the last three-month period alone and demand at an all-time high of almost 400,000 square metres at the mid-year point. Supply remains well controlled with almost half of all of the office stock currently under construction in the city centre already committed”.
Dublin Office Take-Up 2015 – H1 2019
Source: CBRE Research
In total, there were 3 pre-letting transactions signed in Q2 2019 that accounted for 35% of Dublin’s take-up in the quarter. 6 of the ten largest office transactions signed in Q2 were to Irish companies.
The volume of stock reserved at the end of the quarter was almost 106,000m2 which bodes well for a strong Q3. Demand stands at an all-time high of almost 400,000m2 at the mid-year point, with 61% of requirements at the end of Q2 2019 specifically focussed on Dublin city centre
Unusually, lettings to computers & high-tech tenants accounted for only 4% of take-up in Dublin in Q2 although this sector accounted for 44% of office take-up in the capital during the first half of 2019.
The public sector accounted for the largest proportion of office take-up in Dublin in Q2 (41%), while the business services sector and the consumer services & leisure sectors each accounted for 19% and 17% of leasing activity in Dublin in Q2 2019 respectively. 4 of the 10 largest lettings completed in Dublin during Q2 2019 were expansions. Another 4 were relocations and 2 were lettings to new entrants to the capital.
The overall rate of vacancy in Dublin rose in Q2 2019 to 5.65% from 5.39% last quarter. Meanwhile, the overall rate of vacancy in the suburbs at the end of Q1 was approximately 6.83% compared to 6.21% three months ago.
There were 36 individual lettings signed in Dublin city centre during Q2 of which 29 occurred in the Dublin 2/4 district specifically. Although there were only 2 transactions signed in the Dublin 1/3/7 district in the three-month period, these two transactions accounted for 42% of take-up in Dublin city centre in Q2. Meanwhile, the Dublin 2/4 district, which generally accounts for the largest proportion of take-up in the city each quarter, accounted for 47% of Dublin city centre office take-up in Q2.
Meanwhile, in the suburbs, there was 8,610m2 of office transactions signed in Q2 2019 in 14 individual transactions with the suburbs accounting of 19% of all leasing activity in Dublin in the three-month period. 60% of the office leasing activity signed in the suburbs in Q2 occurred in the south suburbs with the west suburbs accounting for 31% of take-up and the north suburbs accounting for the remaining 9%.
Offices have accounted for 37% of investment spend in the Irish market in the first half of 2019. Prime headline rents remain steady at €700 per square metre while prime yields are also steady at 4%.