Prelets accounted for 44% of Dublin office space leased in Q4 2016, according to Savills.
The advisory firm said 301,000 sq ft of leased space was prelet, and in Dublin 2 and 4, 61% of space was prelet.
Savills chairman Roland O’Connell said preletting is emerging because it delivers benefits for all parties in the current market.
He said: “Although enough grade-A space is available to accommodate around 2,200 office workers, occupiers with large space requirements or very specific locational preferences are facing an increasingly limited choice of buildings. Preletting opens up a wider set of possibilities for tenants and some are willing to forego immediate occupancy in return for buildings that tick the right boxes in terms of location, fit and finish.”
Savills noted that rents for prelet offices are currently trading at a discount to rents on space for immediate occupation, reflecting that some developers may be willing to offer competitive rent deals to ensure their projects get funded and completed within the current cycle.
Looking ahead, however, it forecasts the trend may begin to reverse as completions of speculatively built office blocks provide more tangible competition for prelets.
Read the full Savills report >>
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