Constrained supply has pushed prime Dublin office rents to €42.50 (£33.60) per sq ft, according to CBRE Ireland’s bi-monthly market briefing.
This compares with €40 recorded at the end of June, which represents a 15% rise in H1.
By contrast, prime office rents in the south suburbs stood at €18.2 per sq ft at the end of August, while rents in the north and west suburbs are €14 and €12.5 per sq ft respectively.
A shortage of stock and a lack of new development means that demand far outstrips supply at the top end of the market, according to CBRE’s latest market update, which predicts that prime office rents in the city centre are likely to break €45 per sq ft imminently.
Prime Dublin office yields are currently 5%.
On the investment side, Dublin saw the seventh-highest level of deal activity in the EMEA region in the first six months of 2014 – the first time that the city has appeared in the Top 10 ranking since 2006, according to CBRE.
Marie Hunt, executive director and head of research, CBRE Dublin, said: “Deal flow in the Irish commercial property market has been phenomenal over recent months, with activity even continuing at pace during the summer months when the market is typically quiet. Indeed, there has never been a busier July and August in the Irish investment market or the hotels and licensed sector of the market than experienced in 2014 with transactions being completed right throughout the summer and several portfolios and assets launched for sale in this period”
The end of a capital gains tax waiver on commercial property transactions in December is expected to contribute to an increase in the pace of transactions over the autumn, Hunt said.
sophia.furber@estatesgazette.com
