The office market in Dublin proved robust in the last three months of 2022 despite pull-back in growth in the technology sector, according to a report by commercial property specialists CBRE.
Take-up in Q4 totaled at 74,942 sq m, driven by two large, high-profile transactions: Citigroup signing for 27,871 sq m of space at the planned Waterfront South Central development in the north docklands, and the assignment agreement reached between SMBC Aviation Capital and the recently acquired technology company Slack, for 12,577 sq m of space at the newly refurbished Fitzwilliam 28 in Dublin 2.
This brought annual take-up to 233,820 sq m for 2022, marginally below the 10-year annual average of 240,000 sq m but up almost 60% year-on-year.
The report showed absorption trends are changing, while demand is now largely driven by professional, financial and public sector occupiers, as technology sector sentiment has weakened.
The vacancy rate in the Dublin market is 11% at present, with another 160,000 sq m of grey space currently available to lease.
It found that competition at the prime end of the market remains solid, while weakness is coming through in secondary and the suburbs. Office investment volumes were lower in Q4, totaling €110m, while prime yields continued to soften.
Head of Advisory and Transaction Services at CBRE Ireland, Dan Shannon said, "Q4 showcased the increasing concentration of large leasing activity among financial services and professional services occupiers. We expect requirements from such tenants to be the primary driver of activity in 2023".
Head of Investor Leasing at CBRE Ireland, Alan Moran commented, "Prime rent levels have held firm in Q4 at €65.00 per sq ft, with an increasing bifurcation between prime and secondary stock emerging as occupier's ESG requirements continue to have material impacts. We continue to see strong momentum in office viewings with demand focused on smaller size brackets in the 20,000 sq ft to 50,000 sq ft range".