2024 is set to be the most active year for Dublin's office market since the Covid-19 pandemic disrupted the sector.
New data from commercial real estate and investment management company JLL shows robust leasing activity between July and September.
570,000 sq ft of office space was leased during the three month period, bringing the total so far this year to 1.7m sq ft.
The third quarter outperformed the five-year quarterly average by 15.6%, with the number of deals signed up 28.7% in the same period.
Compared to the same time last year, the volume of space leased increased by 115.3%, and the number of deals rose by 47.1%.
The first nine months of 2024 have been the strongest for office leasing in Dublin, with volumes up 24% from the five-year average for this period.
EY's signing of over 130,000 sq ft at Wilton Park marked the largest deal between July and September.
In addition, sublease or assignment deals, known as 'grey space', accounted for 46.5% of the volumes.
Dublin 2 remained the most active sub-location, accounting for 56% of take-up volumes, followed by the M50 North area at 10.5%.
The latter saw a boost from two deals totalling over 50,000 sq ft at Two Dublin Airport Central, with Flogas and Boeing taking space.
Today's report shows that the office market in Dublin maintains a relatively high vacancy rate of 15.9%, with a marginal increase of 0.2% in the third quarter of this year. Total vacant supply stands at 7.9m sq ft.
However, when excluding reserved space, the vacancy rate drops to 14.2%, down from 14.7% in the previous quarter.
The report states that vacancy rates are expected to rise in the second half of this year and the first half of next year, as new space reaches completion.
Despite this, the Grade A+/A market is tightening, with occupiers preferring best-in-class space to attract top talent and meet sustainability targets.
This trend was evident in the third quarter of the year, with 70% of take-up comprising Grade A+/Grade A space, accounting for 80% of market take-up year-to-date.
Currently, 2.5 million sq ft is under construction and refurbishment throughout the county, with 280,000 sq ft expected for completion between October and December.
Prime City Centre quoted rents for new Grade A+/A buildings range from €58 to €62.5 per sq ft, while prime suburban quoted rents range from €27.50 to €32.50 per sq ft.
"While the vacancy rate has marginally increased to 15.9% from 15.7% in the previous quarter, a closer look reveals a more optimistic outlook for the Dublin office market," said Niall Gargan, Head of Research at JLL Ireland.
"The current vacancy figure includes over 400,000 sq ft at College Square, which Workday is expected to officially sign in the coming months.
"When this space, along with over 500,000 sq ft of additional reserved space, is signed, the vacancy rate in Dublin will drop to 14.2%. This remaining 14.2% vacancy comprises 53.5% Grade A+/Grade A space," he added.
