HWBC is predicting a shortfall in high-quality, BER A-rated office space in Dublin by the end of the decade.
Its latest report reveals a steady demand for office space in the first six months of the year.
However, it states that the balance between supply and demand is beginning to shift for prime space.
Take-up in the first half of the year reached 1.05 million sq ft, with a further 1 million sq ft already reserved.
HWBC expects full-year leasing activity to exceed 2 million sq ft.
"While near-term demand remains well-supported, the longer-term availability of best-in-class office space is now in question," the report states.
"Of the 1.39 million sq ft currently under construction in Dublin, around 67% is already committed.
"That leaves just 450,000 sq ft of new space coming to market, and no further speculative development in the pipeline beyond 2026."
Leasing activity continues to focus heavily on the city centre, which accounted for more than 80% of transactions in the first half of the year.
The standout transaction in the period was Workday’s 416,000 sq ft pre-let at College Square, the largest office leasing deal in Europe since the pandemic.
Other notable deals in the first half of the year included EY’s 151,000 sq ft letting at Wilton Park, Vodafone taking 63,000 sq ft at 70 St Stephen’s Green, Apple signing for 38,000 sq ft at Park Place, and the HSE agreeing 31,000 sq ft at 110 Amiens Street.
While overall market vacancy currently stands at 16%, HWBC said this figure masks the growing scarcity of available space at the top tier of the market.
HWBC expects this tightening supply-demand dynamic to drive further upward pressure on prime headline rents, which are currently in the range of €60-€65 per sq. ft., with €70 per sq. ft. expected to be achieved in 2026 for the highest-quality buildings.
HWBC also expect incentives to harden as the new supply is taken up.
