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News Release

Dublin

Office Take-up steady in year-to-date (Q2 2013)

1.5 – 1.6m sq.ft. totals expected for 2013


There were mixed messages from the office sector this quarter, with positives and negatives emerging from supply and demand. Although there was a decrease in take-up compared to last quarter, half-year take-up is greater than the same point last year by 5%. In addition, there were a number of deals that did not complete in quarter 2 that are expected to transact in quarter 3. There is 735,000 sq.ft. of reserved space for next quarter, which will help to boost quarter 3 take-up and year-end total volumes for 2013. It is expected that the total take up for 2013 should be in the region of 1.5 - 1.6 million sq ft.

Take-up was impacted this quarter by no large deals greater than 40,000 sq.ft. transacting. Although there were 32 deals this quarter, take-up continues to be dominated by smaller lettings, with the largest transaction totalling only 32,000 sq.ft. 92% of all transactions was for space less than 10,000 sq ft, with only 3 deals greater than 10,000 sq ft. Average deal size was only 5,643 sq.ft. which is almost 50% lower than the average last quarter (10,477 sq.ft.). The largest city centre deal was only 8,756 sq ft. this quarter.
 
Technology, Media and Telecommunications companies continue to dominate take up with 16 out of the 34 deals from the TMT sector. This includes 8 out of the top 10 deals in terms of size. The trend for TMT take-up is set to continue throughout the year with a number of TMT’s already on the reserved space list for next quarter. 
 
The vacancy rate remains steady at 19.0% and is lower than this time last year when it was 19.5%. We expect vacancy to remain at high levels whilst there is a significant level of older vacant stock. 65% of the vacant stock in Dublin is Grade B and C which totals 5.1m sq.ft. and of the 15.8% city centre vacancy rate, 4.2% was developed pre-1990. These buildings would be considered highly un-lettable in today’s market. 
 

Hannah Dwyer, Head of Research said that ‘Q2 confirms a number of trends that have arisen over the past 12 months. Demand remains focused on prime quality space. TMT letting activity remains strong. There is volatility in the size of transaction in the market place with average size of transaction varying significantly per quarter. Vacancy remains stubbornly high with a high level of vacant older stock on the market. There has been some uptick in activity in the suburbs, which may be a reflection of the continuing tightening of choice in the city centre Grade A locations’.