Lisney predicts another strong year for office space on the back of strong demand

Strong demand will lead to another solid year for the property sector this year, according to estate agents Lisney, but a lack of supply will limit activity.

Its 2019 outlook expects demand for new offices will outstrip supply, with much of the space due for completion this year already let to companies. This follows multiple years of massive construction in the area.

"It continues to be a strong sector," said Paul Hipwell, Divisional Director at Lisney. 

"We measure the amount of activity in the office market by the amount of space taken up by commercial occupiers and last year we saw that nearly 3.9 million square feet of office space was taken up in the wider Dublin region.

"That's remarkable when you consider that the previous year it was 3.6 million square feet and we thought that that was a record, never to be repeated," Mr Hipwell said. 

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Mr Hipwell said that half of that space was accounted for by the technology sector, with a focus in Dublin city centre. Meanwhile of the space that is set to be completed this year, much of it already has an occupier ready to go.

"Half of [what is being constructed this year] is already pre-let - that's going to add to the supply issues," the estate agent said. He added that a number of issues were keeping a lid on supply - funding being one - though he would not go so far to call it a bottleneck. What he does anticipate, however, is for issues around resources and workers to become more acute as the residential market continues to rise. 

Lisney is seeing pension and investment funds becoming an ever-increasing force in the residential rental sector, all while smaller landlords exit the market. "The private rental sector is the one that's ever-increasing; it's accounted for a quarter of all investment last year," Mr Hipwell said. "That sector is going to continue to grow, it's going to continue to soak up expertise and that's going to increasingly impact the office construction sector.