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News Release

Robust performance by office market in Q3 bodes well for remainder of 2013

Take up for the year to date now stands at 1.15 million sq ft.


The office market produced a robust set of figures for Q3 with take up increasing by over 50%, in comparison to Q2. Take up for the year to date now stands at 1.15 million sq ft. There is 700,000 sq ft of space already reserved for Q4, suggesting that if all deals can be completed before the end of 2013 combined with new demand, take up may reach 2 million sq ft.

Take up in Q3 was impacted by two large deals which accounted for 43% of take up this quarter. Deutsche Bank leased 110,000 sq ft at East Point whilst Novartis took 87,000 sq ft of office space at the Vista Building in Elm Park. Overall, there were 57 transactions in Q3. 85% of transactions were for space less than 10,000 sq ft. and the average deal size stood at 8,042 sq ft, in line with the average for 2012.
 
Banking and finance has overtaken Technology, Media and Telecommunications (TMT) as being the dominant sector in Q3 accounting for 30% of take up. This is mainly attributed to the significant Deutsche Bank transaction. In general, there has been a noticeable increase in demand from the traditional banking, financial and legal sectors in Q3 which is positive news for the domestic economy. TMT’s remain very active in the market and there is a growing trend towards non-traditional, ‘quirky’ office space.
 

Fionnuala O’ Buachalla said that “Q3 has been very positive and take up for 2013 could reach 2 million sq ft. It is good to see demand being driven by the banking, financial and legal sectors once again in tandem with the TMT’s. Occupiers remain budget conscious and continue to seek fully fitted office accommodation which will cut down on fit-out costs”.

 

Vacancy for Q3 is 7.3 million sq ft which is a 5% decrease on Q2. There is a high level of vacant older stock on the market with only 2.2 million sq ft of vacant Grade A stock remaining in the entire Dublin market. The shortage of vacant Grade A stock and growing demand is resulting in a hardening of rents and incentives.

 

Deirdre Costello states: “Challenges remain in the market. In particular the lack of new development will become a growing issue especially as larger size requirements in excess of 50,000 sq ft come to the market. Until such time as new developments become economically viable we will continue to see more refurbishments of older stock to cope with the demand for Grade A space”.