Healthy Volumes Of Office Letting Activity Buoyed By Continued Foreign Direct Investment
Dublin, October 8th 2013 – Property consultants CBRE today released office take-up statistics for the third quarter of 2013 showing that 41,690m2 of office transactions were signed in Dublin in the third quarter of 2013, which is up almost 48% on the volume of take-up achieved in the previous three month period.
The property consultants attribute this healthy volume of office leasing activity to continued job creation on the back of continued foreign direct investment. This brings total office take-up in Dublin during the first nine months of the year to almost 110,000m2, which is 25% higher than the volume of transactions signed in the Dublin office sector in the same period last year.
- Office take-up in Dublin up 25% year-on-year
- 56 individual office letting transactions signed during Q3 2013
- Almost 80% of Dublin office take-up in Q3 located in the city centre
- 68% of total lettings in the quarter smaller than 465m2 (5,000 sq. ft.)
- Prime rents expected to increase over coming months as the scarcity of prime office
buildings in the city centre escalates
- Continued decline in vacancy rates in all districts
- Prime office yields have contracted by a full 150 basis points in the last 18 months
- Escalation in investment transactional activity over recent months
- Prime office yields contracted to 6% at the end of Q3
In addition to the 83 transactions recorded in the first half of 2013, CBRE say that there were 56 individual office transactions signed in the capital during Q3 2013 with the vast majority comprising relatively small lettings. In fact, according to CBRE, almost 38 of the 56 lettings signed in the period (68%) extended to less than 465m2 (5,000 sq. ft.). 4 of the ten largest transactions in Dublin in Q3 comprised expansions while 6 comprised new entrants. The city centre accounted for 79% or 33,094m2 of take-up in Dublin in Q3 2013 with the suburbs of the city accounting for the remaining 8,596m2 (21%) of transactions in the period. The overall office vacancy rate in Dublin at the end of Q3 2013 was 16.4%, down from approximately 17.2% last quarter. Vacancy rates in all districts declined quarter-on-quarter which is encouraging with the Grade A vacancy rate in Dublin 2/4 now 5.6%.
Although the majority of office transactions signed in the last three months were relatively small, there were two transactions of greater than 4,645m2 (50,000 sq. ft.) signed in the capital during Q3 - the letting of 10,161m2 to Deutsche Bank at The Pinnacle 2 building in Dublin 1 and the letting of 8,083m2 to Novartis at Elm Park in Dublin 4. The Deutsche Bank letting was the largest office letting to sign in Dublin in 2013.
Buoyed by encouraging occupier activity, investors continue to focus on office investment opportunities. 30% of the €1.065 billion invested in the Irish market during the first nine months of 2013 comprised office properties although there were other office buildings included in some of the portfolios classified as ‘mixed use’ that traded. CBRE believe that prime office yields in Dublin are now in the order of 6.0% and expect them to trend stronger over coming quarters due to the weight of capital chasing prime opportunities and prospects of rental growth emerging. Prime office yields in Dublin have now contracted by a full 150 basis points since January 2012.
According to Marie Hunt, Head of Research at CBRE Ireland “ As witnessed in many sectors of the Irish commercial property market over the course of 2013, activity in the Dublin office sector continues at pace with more than 110,000m2 of office lettings agreed in the first nine months of 2013, which is up 25% on the same period last year. Having increased to approximately €323 per square metre during Q2 2013, prime office rents have remained stable during the last 3 month period but look set to rise further over the course of the coming months as the competition for the best office buildings escalates in the absence of any new build”.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.
In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 110 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, valuations and research. Please visit our website at www.cbre.ie or www.cbre.ie./ni
CONTACT: Marie Hunt – 00 353 1 6185543 / 00 353 87 2727115 or e-mail:firstname.lastname@example.org