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News Release

Dublin

Dublin Office Market Insight 2012

The Dublin office market performed steadily last year with increased levels of take-up in line with the 5 and 10 year averages, high rates of FDI and a decreasing vacancy rate over the course of 2011.


Following the success of the Offices 2020 presentation we held on Thursday last week, we are delighted to announce the publication of The Dublin Office Market Insight for 2012.
 
Using our 2011 office market data, we have interpreted key trends to provide insight into the ways we think the market will be heading over the course of the year in a way.
 
The report looks at 5 key messages that have emerged from an analysis of our 2011 office statistics in a way that should be of interest to investors, landlords and occupiers. This is a new format to our yearly report and doesn’t simply look at last years stats, it looks forward and answer’s key questions we should be thinking about at the moment. The five key messages include:

1. What is driving demand?
2. Who is interested in space?
3. Can the Dublin Market meet demand?
4. What sort of incentives are tenants expecting?
5. What will happen next year?
The Dublin office market performed steadily last year with increased levels of take-up in line with the 5 and 10 year averages, high rates of FDI and a decreasing vacancy rate over the course of 2011.

Hannah Dwyer, Research Analyst at Jones Lang LaSalle explained that ‘signs are already starting to emerge from office market data which can help us stay ahead of the game this year’. A clear message emerging is that ageing buildings are less desirable to occupiers, with 86% of take-up for post-1990 office space and only 5.4% of take-up for Grade C space. She explained that ‘it is very clear from take-up data last year that occupiers are favouring newer, modern office stock, with older stock struggling to compete. It is therefore increasingly important that older commercial buildings, regardless of location are refurbished or even redeveloped to a lettable standard if they are to be successful in the current market’.

Another key trend for 2012 is likely to be an increase in the vacancy rate, despite it reducing this year. Deirdre Costello, Director of Office Agency explained that ‘we anticipate the vacancy rate will increase over the course of this year, not through new development, but through a number of buildings coming back onto the market mainly due to break options, lease expiries and relocations’. She added that ‘this could release in excess of 500,000 sq.ft. of space onto the market with buildings such as Bank of Ireland on Lower Baggot Street (220,603 sq.ft) being vacated’. 

Demand this year was driven by FDI (foreign direct investment), with companies including MasterCard, Dell and Linked-In leasing offices in Dublin. Fionnuala O’Buachalla, Director of Tenant Rep explained that ‘there was a noticeable surge in demand from multinational companies looking to locate or expand within Dublin as it is such an attractive business location. With more that half of the total floorspace occupied in 2011 driven by FDI companies, we envisage that this will continue into 2012’.
 
A full copy of the report is available on the Jones Lang LaSalle Ireland Research pages.