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News Release

Dublin

Mixed messages emerging from Q1 2012 Office market, but enquiries remain strong

Whilst take-up for Q1 2012 was significantly lower than the previous quarter (-18.4%) and this time last year (-47.4%), there are some signs of positivity for the office market with the number of enquiries increasing by almost 20%.


Although most of these deals did not take place in Q1 2012, it is hoped that they will be completed in Q2 which will boost take-up levels for the year and make up for the slow start to 2012.
 
Deirdre Costello, Head of Office Agency said ‘It is also not surprising that take-up is almost 50% lower than this point last year, with the largest deal this quarter at 45,000 sq.ft. and the largest deal in Q1 2011 (Montevetro) exceeding 200,000 sq.ft. in one transaction alone’. She also added that ‘It is difficult to compare market performance when one-off deals of this size took place a year ago which skew the quarter results’.

The average deal size of 7,023 sq.ft. this quarter still shows that demand is very much focused on space less than 10,000 sq.ft. There is still plenty of stock available under 10,000 sq.ft, however we may see shortages of good quality prime D2/D4 space emerging in this size category, which could engender some completions for better buildings.

Other messages emerging from the report show that the technology sector is still driving demand, accounting for 30% of all deals this quarter, followed by Banking and Finance (15%). Both of these sectors have consistently out-performed the rest of the market and we expect this to continue throughout the year.

Statistics also reveal that tenants are still very much focused on location and quality, with 30% of deals for buildings in D2, and 90% of deals for 3rd Generation space. Fionnuala O’Buachalla, Director of Tenant Rep said that ‘Occupiers are making the most out of market conditions and are negotiating flexible leases and low rents in attractive locations. It also means that there is increasing pressure on landlords to refurbish and improve older stock in order to compete with the more modern vacant properties on the market’. 
We can also expect to see the first pre-lets on the market within the next 12-18 months with limited availability of large HQ buildings in Dublin, and some evidence for demand emerging from occupiers.