With many large office requirements having been put on hold or delayed by corporate occupiers as a result of global economic uncertainty over recent months, there was an expectation that annual office take-up in Dublin might only reach 100,000 square metres in 2012, compared to its long-term average of more than 150,000 square metres.
However, a relatively healthy 32,027m2 of office lettings were signed in Dublin in the third quarter of 2012, ending another three month period when a large volume of smaller office lettings buoyed the market. There were 51 individual office lettings signed during Q3 2012, bringing the total volume of office take-up in the capital in the first nine months of 2012 to 86,867m2.
While the volume of annual take-up in 2012 will be considerably less than the long-term average for the city, a year- end figure of 110,000m2 now seems the most likely outcome – an impressive result considering the economic backdrop both domestically and internationally.
Overall demand for office accommodation in the capital was down slightly quarter-on-quarter with approximately 165,000m2 of outstanding requirements for office accommodation at the end of Q3, compared with approximately 175,000m2 at the end
of the previous quarter. There was more than 18,550m2 of office accommodation reserved in the capital at the end of Q3 2012.
The overall office vacancy rate in Dublin at the end of Q3 2012 was 22.1%, up from 21.9% last quarter with 796,174m2 of office accommodation being officially marketed to let in the Dublin market at the end of the third quarter of this year. The ten largest lettings signed in Q3 accounted for almost 56% of take up between them. Four of the ten largest lettings in Q3 comprised companies expanding to larger premises; three were brand new requirements while the remaining three were companies relocating to alternative premises.
There were 51 office lettings, extending to 32,027m2 signed in the Dublin office market during Q3 2012. The volume of take-up in the quarter is 26% less than that achieved in the capital in the same quarter in 2011 and is approximately 15% less than the average volume of take-up achieved in Q3 over the last five year period.
18,070m2 or 56% of overall office take-up in Dublin in Q3 occurred in the city centre with the suburbs accounting for the remaining 44% or 13,957m2 of lettings signed in Dublin in the period. Suburban take-up was boosted as a result of some of the larger office lettings signed in Q3 being located in the suburbs.
Our research indicates that 22% of the office take-up in Q3 comprised lettings of smaller than 465m2 (5,000 sq ft) in size. 19% of the quantum of accommodation let in the period comprised lettings that extended to between 465m2 and 929m2 (5,000 sq ft and 10,000 sq ft) in size. A further 24% of the volume of lettings signed in Q3 comprised lettings of between 929m2 and 1,858m2 (10,000 sq ft and 20,000 sq ft) in size while the remaining 34% of the quantum of office accommodation let occurred in lettings of between 1,858m2 and 4,645m2 (20,000 sq ft and 50,000 sq ft) in size. There were no lettings of more than 4,645m2 (50,000 sq ft) signed in Dublin during Q3 – the fourth quarter this has been the case, with the largest letting to sign in Q3 2012 being the letting of 3,948m2 to Capita in 2 Grand Canal Square in Dublin Docklands.
According to our research, there was approximately 796,000m2 of office accommodation being marketed to let in the capital at the end of Q3 2012, up from 790,000m2 the previous quarter.
Tenants in the computers and high tech sector accounted for 27% of office lettings signed in Dublin during Q3 2012. The business services sector accounted for a further 25% of letting activity in the period. Tenants in the manufacturing, industry and energy sector accounted for a further 14% of Q3 letting activity in the capital while the financial services sector accounted for 15% of lettings signed in Dublin during Q3. The public sector accounted for only 2% of office take-up in Dublin during the third quarter of 2012.