Third Quarter Bounce for the Dublin Office Market

Dublin Office Take-Up Q3 2020 – Q3 2021 Source: CBRE Research

Commercial property specialists CBRE today released figures for the volume of office leasing activity completed in Dublin in the third quarter of the year. According to CBRE, the Dublin office market is now firmly in recovery mode following low volumes of occupier leasing being recorded since the onset of the pandemic as several occupiers put expansion and relocation plans on hold. 

CBRE have been reporting increased activity in the Dublin office market in recent months, particularly since an easing in restrictions has enabled potential occupiers to travel and inspect buildings. This is now manifesting in higher volumes of leasing activity. Indeed, take-up in the Dublin office sector in Q3 2021 was the highest quarterly take-up since Q1 2020 with leasing activity reaching almost 40,000m2 in 49 individual transactions during the three-month period compared to 46 lettings signed in the first two quarters of 2021 combined.  This brings total take-up in the Dublin office market in the first nine months of 2021 to 61,827mwith a further 98,867m2 of stock reserved at the end of Q3 and likely to sign in the coming quarters. Encouragingly, according to CBRE Research, the overall rate of vacancy in the city has fallen again this quarter to 8.8%, having peaked during the pandemic at 9.6%.

According to Vanessa Mansfield, Associate Director in the office leasing team at CBRE Ireland, “Now that lockdown measures have eased, office workers have started to return to their offices and occupiers are once again able to travel and inspect buildings, there has been a discernible increase in appetite for office accommodation in the Dublin market. Take-up volumes are showing signs of improvement quarter-on-quarter. In addition, demand has increased in each of the last three quarters, with total requirements for accommodation in the capital at the end of Q3 2021 in excess of 407,000 square metres – close to the pre-pandemic peak in Q4 2019, which is very encouraging”.

According to CBRE, in addition to strengthening occupier appetite, demand for prime office investment opportunities also remains strong. This is evidenced by the fact that prime office yields in the Dublin market have remained stable over the last few years despite the pandemic and the fact that keen pricing has been achieved for office investment opportunities that have traded in the last 12-18 months.

According to CBRE research, more than €211 million was invested in office investment properties in the Irish market during Q3 2021, bringing total investment spend in this sector to more than €911 million in the first nine months of 2021.  This equates to approximately 26% of total investment spend in the Irish market in the period.