A new report by BNP Paribas Real Estate Ireland (BNPPRE) reveals emerging positives for the Dublin office market,but cautions that there are still some short-term headwinds.
Positives
· Q3 take-up rose by 66%y/y to 48,000 sq m, consolidating the improvement seen in Q2
· Demand from ‘traditional’ sectors e.g. financial and professional services remains strong
· Recent jobs surge raises hopes that tech leasing could re-ignite
· Plenty of choice for tenants seeking good quality business space on flexible terms
· Development pipeline now slowing
Remaining Challenges
· Tech sector remains dormant protem, accounting for 7.1% of Q3 take-up (was 51% between 2017-2021)
· Back-to-the-office dynamic appears to have slowed, with potential impacts for office demand
· Nearly half of Q3 take-up was accounted for by sub-lets / assignments which do not subtract from vacant space
· Dublin currently has one of Europe’s highest office vacancy rates
· Although slowing, a considerable pipeline of new office construction is likely to push vacancy higher in the short term
BNPPRE Director of Research John McCartney commented;
“The ongoing improvement in take-up is an important first step towards a market recovery. However, with a significant pipeline of new space already under construction, vacancy is likely to tick-up further in the short-term, keeping pressure on rents.”
Report :- BNP Paribas Real Estate Dublin Office Market Report Q3 2024
