Dublin’s office market had a healthy first quarter despite some office requirements being put on hold, according to CBRE.
Take-up in the first quarter of 2020 was 50% higher than the five-year average, albeit down 7% compared to the first quarter in 2019, with less than 100,000 sq ft of office space leased.
Almost 1.1m sq ft was leased in Q1, with a further 947,224 sq ft reserved at the end of the quarter, CBRE reported.
Of this there were five prelets signed in Q1, which comprised 31% of the Irish capital’s take-up, and Irish companies accounted for 12 of the 31 deals signed – 39% of take-up.
Another 14 of the deals were to US firms, accounting for 45% of the leasing activity in the quarter, and two to UK companies.
Tech firms accounted for 51% of this take-up, followed by financial services (25%) and business services (14%).
The overall vacancy rate stood at 5.06% at the end of Q1. Rents remained stable at €65 per sq ft.
However, with the outbreak of Covid-19 there has been a 21% decline in the volume of overall demand for office space quarter-on-quarter, with overall demand standing at approximately 3.7m sq ft at the end of Q1
Marie Hunt, executive director and head of research at CBRE Ireland, said: “This is still a very healthy volume of demand. Part of the decline in demand quarter-on-quarter can be attributed to some requirements being fulfilled during the last three-month period.
“However, some requirements have also been put on hold in recent weeks as occupiers put off decision-making and adopt a ‘wait and see’ approach with regard to expansions and relocations to focus on their core operations and business continuity.”
Prior to the Irish government stopping non-essential construction there were 34 office schemes, totalling more than 5m sq ft, combined on site in the city centre. Of these 48% had already been prelet.
CBRE expects the completion dates on many of these office schemes to move out by at least three months.
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