THE IMPROVING ECONOMY is driving a greater demand for office space to handle expanded staff, property consultancy Savills has said.
In its latest commentary on the Dublin market, Savills found that 57,000 square meters of office lettings were signed in the first three months of 2014, an increase of 32 per cent on last year.
Director of research Dr John McCartney said that the growth in high-tech and professional jobs in the capital is driving the competition for office space.
“Ireland has staged a remarkable labour market recovery with over 63,000 additional jobs created in the last two years. Half of these have been in Dublin and, of these, approximately half have been in ICT and professional services.”
He continued:
These trends are reflected in the pattern of office take-up, with ICT and professional services firms accounting for almost 55 per cent of Dublin lettings in Q1 2014.
Vacancy
Correspondingly, office vacancy rates have sharply dropped off, with the rate down to 14.5 per cent from a high of almost 24 per cent in 2011. However, there is a fear that a decline in quality of office space is around the corner.
Director of offices Roland O’Connell said:
“As new entrants and relocating occupiers have gravitated towards the better space that is available on the market, the quality of Dublin’s vacant stock has deteriorated. Particularly for occupiers seeking large parcels of top-specification space in the prime business locations, choice is becoming increasingly restricted.”
He said that there should be an increase in new office development, but warned that funds to drive a build-out are thin on the ground.
“The scarcity of development finance is proving to be a particular problem in this area, and in the short term it is hard to see how this is going to improve.”
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