The latest research from JLL, tracking Dublin’s office market, indicates that 473,000 sq ft of transactions were signed in Q1 2022 across 37 deals. This compares to 958,000 sq ft across 53 deals in Q4 2021 and an increase of +944% on the volume of space leased in Q1 2021. The average deal was 12,805 sq ft compared to the 2021’s annual average of 12,125 sq ft.
Confidence has been restored to the market in the face of the hybrid model becoming a part of the foundation of the modern workplace. Over 1.18m sq ft is currently reserved with 23 requirements for space 50,000+ sq ft. Occupiers, which initially were expected to downsize, are now opting to keep and expand on their existing stock due to shifts in attitudes. The office is now seen as a communal area, primed to be a space for collaboration, and a respite from the ‘work from home’ model.
Conor Fitzpatrick, Associate with JLL’s Office Agency team commented “It is extremely encouraging to see the ever-increasing signs of recovery and tenant appetite for best-in-class buildings which can satisfy their ESG targets and the health and wellbeing demands of their staff. With a strong pipeline of high-quality buildings and the demand to occupy them, the Dublin office market looks to be in rude health.”
Take-up in the City Centre once again exceeded the suburbs by a margin of 82%/18% in terms of volumes. Dublin 2 remains the strongest performing sub-market with 54% of overall take-up, twice that of Dublin 1 with 27%. Technology once again dominated the market. The sector represented 53% of take-up, which is above the 10-year market average of 42% and the sector also represents 35% of all active demand.
Sustainability will be a key issue for both landlords and tenants. The office is now part of a company’s brand and is tied in with its sustainability targets. This has led many to flock towards high-quality space which weighed favourably towards Grade A space with take-up of 90% Grade A, 8% Grade B, and 1% Grade C. As the pandemic remains fresh in the mind, high-quality office space is also in demand as occupiers seek spaces that are capable of being Covid-19 compliant with contemporary spacing and ventilation systems.
This surge of demand for high-quality space is anticipated to push prime headline rents to new records of €65 – €70 by year-end.