Dublin's Office Transactions Back To Pre-Pandemic Levels

The three months to the end of June saw the second-largest amount of leasing activity since before the pandemic, according to new research from JLL.

The agent’s latest market report found that 506K SF of office space was transacted in Q2 of 2022, spread across 60 transactions.

The figures are the highest since Q4 of 2021 and form a 7% increase on the 474K SF in the first three months of the year. The figures were more than double the 216K for the same period in 2021. 

The tech industry accounted for 31% of space leased across five deals, with banking and finance sitting just behind that in second place with 30% of the market across 14 deals. One-third of leases were located in the suburbs in Sandyford and Citywest.

“New space will play a more significant role in the market’s leasing activity, with occupiers meeting environmental, social and corporate governance criteria," JLL Ireland Head of Research Niall Gargan said. "A reset is underway with carbon footprint, climate change and health and wellbeing radically disrupting what constitutes a best-in-class building." 

Due to the regulation and competitiveness of the market, new builds will automatically demand a premium rent if standards and the location are favourable, he added.

The vacancy rate for office space in Dublin for this quarter stood at 12.1%, up slightly from 11.2% in Q1 and is at 10.2% when reserved space is removed, up slightly from 9.7% in Q1. The spike in the vacancy rate can be attributed to new space entering the market along with 875K SF of office space under construction going to practical completion in the quarter. The completed office space was 67% pre-let.

JLL’s head of research noted that “optimism has been further restored to the market as we enter the second half of the year with 1.2M SF of floorspace reserved”.

JLL Ireland also said it had identified more than 3.5M SF of active demand in the market, with 19 requirements for space of more than 50K SF. Despite the downturn in the share prices of its companies, the tech industry reflects 25% of the active requirements as Dublin retains the moniker of tech capital of Europe.

An appetite for high-quality space is anticipated to push prime headline rents beyond the current €65 per SF by year-end.