Dublin office market doing well with H1 rents up 9%

Dublin city center rents rose 9% in the first six months of the year to €62.50 per square foot, according to new figures from independent property firm HWBC.

The review of HWBC’s Dublin office for the first half of 2022 said rents had risen despite global uncertainty caused by the war in Ukraine, rising energy costs and the start of a cycle of hikes interest rates to fight inflation.

HWBC said the strong rebound in appetite for new space that began late last year continued into the start of this year, with 945,000 square feet of new space leased during the period. , more than 4.5 times the amount of the same period a year since.

He noted that demand continues to be driven by foreign direct investors, which accounted for four of the top five deals.

Notable first-half deals included Service Now pre-letting 88,000 square feet of 60 Dawson Street under construction and Fiserv taking the entirety of Kennedy Wilson’s 10 Hanover in the South Docks.

But HWBC warned that the risks of recovery remained, with the sharp drop in the share price of companies in the technology sector prompting some to review their space requirements.

He said TikTok has reportedly backed out of plans to rent a 177,000 square foot building on Sir John Rogerson’s Quay and Twitter is considering subletting a floor of its offices on Cumberland Street.

HWBC said it expects any decline in demand from big tech companies to be picked up by other sectors, with large mandates currently actively from financial and professional services companies.

Global names such as Citi, EY and Deloitte are all actively reviewing office locations, with more than 600,000 square feet of requirements between them, he added.

Today’s report also indicates that despite strong demand, the overall office vacancy rate in Dublin has increased slightly to 10.6% as occupants become familiar with the new reality of the hybrid working model. .

He added that significant “grey” space continues to come to market as companies adjusting their office spaces to accommodate hybrid working preferences seek to sublet excess space that is excess to needs. .

Trends in the suburbs were also positive, HWBC said, with rents up 5% this year to $34 per square foot.

Sandyford continues to be the most popular location in terms of tenant activity, with Cubic Telecom and NTR taking together 40,000 square feet at The Hive in recent weeks.

Iain Sayer, chief investment officer at HWBC, said the market improvement that began with the easing of pandemic restrictions late last year has continued into the first half of this year.

“Rent levels have increased and there has been a strong increase in occupancy of new space. With strong pipeline demand and healthy levels of reserved space, the second half of 2022 should see similar levels of appetite for the best new urban space,” Mr. Sayer said.

“While some technology companies are reviewing their pace of growth, we expect to see other sectors such as pharmaceuticals, life sciences, professional and financial services become more dominant in terms of activity,” he said. -he adds.

Jose C. Birney