New research from CBRE Ireland confirms Dublin’s office vacancy rate has continued its downward trajectory in the first three months of 2022, with the capital’s vacancy rate now at 8.2%, down from 8.5% at the beginning of the year. According to CBRE’s research, office leasing activity in the Dublin market reached more than 45,000 square metres in the first three months of 2022. While this is up significantly compared to the extremely low volume of office leasing recorded in the same period last year, it remains considerably lower than leasing volumes achieved during the first three months of previous years, with take-up having exceeded 80,000 square metres in the first quarters of 2018, 2019 and 2020, respectively.
CBRE say that Q1 2022 was characterised by the signing of many small office leasing transactions. According to CBRE Research, 42 office lettings were signed in the Irish capital in the first three months of 2022 but with the average deal size in Q1 being only 1,082 square metres, take-up reached only 45,461 square metres. The largest letting signed in the
three-month period was the letting of 7,152 square metres to An Post at The EXO building in Dublin 1.
According to Alan Moran, Head of Investor leasing at CBRE, “Rather than focussing solely on the volume of leasing completed in the first three-month period, we take encouragement from the volume of outstanding requirements in the market and the fact that more than 107,500 square metres of office stock in the capital was reserved at the end of Q1. This bodes well for improved leasing activity over the coming quarters as these transactions ultimately complete.”.
CBRE’s research shows that the computers and high-tech sector accounted for the largest proportion (45%) of city centre take-up during Q1 with the public sector accounting for the next largest proportion (19%) of office take-up in the city centre in the period. Meanwhile, the financial services sector accounted for a further 14% of office lettings signed in the city centre during the first quarter.
CBRE say that prime headline quoting rents in the city centre rose to approximately €629 per square metre (€58.50 per sq. ft.) at the end of Q1 2022 and are expected to rise further over the course of the remainder of the year as new transactional evidence emerges. Meanwhile, prime office yields in the capital remain stable at 4%.