723,000 sq ft of office space let in Dublin in Q1 According to Knight Frank

Q1 letting activity was 62% higher than the same period last year with 723,221 sq ft of space transacting. This strong start to the year suggests that full year 2016 take-up could even surpass the stellar levels achieved in 2015 and indicates that the business community have not been delaying occupational decisions in the context of uncertainty arising from the general election and Brexit vote. The increase in take-up was driven by a relatively large average deal size of 13,393 sq ft across 54 transactions compared to the average deal size of 6,463 sq ft recorded across 69 deals in Q1 last year. Prime Rents remained at €57.50 in Q1.

Q1 saw the market pivot towards Dublin 3 with the postcode accounting for 27% of the market, marginally behind Dublin 2 which had a 30% market share. The high level of Dublin 3 take-up helped boost the city fringe market share to 32%, although it was still behind the city centre which accounted for 47% of the market. Examining the graph below, we can see that this represents a significant departure from historical performance since 2012 with the city fringe, like the south suburbs, having consistently remained within the 10-20% range while the city centre approximately traded within the 50-60% band.

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The activity in Dublin 3 was led by the ESB taking of 77,780 sq ft and 42,390 sq ft at Two and Three Gateway respectively. The ESB will take just under a five-year lease while the €150 million redevelopment of their current headquarters on Fitzwilliam Street takes place. Other significant activity in Dublin 3 included professional services firm Avarto taking 63,000 sq ft at Eastpoint Business Park for €19.50 per sq ft.

Meanwhile in the city centre, finance frim Fidelity International have taken 68,000 sq ft at George’s Quay House where they will pay a rent of €49 per sq ft. Elsewhere in Dublin 2, another financial firm, Hedgeserv, are taking 18,855 on a sub-lease at One Park Place at a rent of €55 per sq ft. Overall, the finance sector accounted for 18% of deals which lagged the state, technology, media telecommunications (TMT) and professional services sectors which accounted for 29%, 25% and 23% of the market respectively.

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