The Dublin office market has continued to operate in a post-pandemic correction mode, with a below average take up rate of 678,000 sq ft for H1 2023, according to property advisor HWBC.
The property firm’s mid-year office market review and outlook anticipates a sentiment shift in H1 2024, as capital values stabilise, and new supply declines.
HWBC’s optimistic view is that the market "correction", which began in Q1 2022, is now “well advanced”.
A rebound will be assisted by “a potential shortage of the highest quality best in class space which occupiers are increasingly focused on at the premium end of the market”.
Key Takeaways H1 2023
• Total office take-up in H1 2023: 678,000 sq ft
• Average deal size: 7,500 sq ft
• Number of deals: 91
• Vacancy rate: 14.4%
• New sustainable 'Green' space dominates leasing transactions
• Anticipated completion of new space by end 2024: approx. 3 million sq ft
• Anticipated full-year take-up: under 1.5 million sq ft
• Expected market sentiment shift in H1 2024.
HWBC reports the continued shift towards sustainable office spaces. Most H1 lettings involved buildings with a minimum BER B rating or better, making older office stock increasingly challenging to lease.
HWBC estimates that with a wider choice of space due to fewer large leasing transactions and a growth in the availability of grey space, the vacancy rate rose to 14.4% in H1.
The property firm predicts a continued reduction in space requirements relative to staff numbers, and lower transaction activity into the first half of the next year.
Despite over 500,000 sq ft of reserved space, full-year take-up is projected to struggle to reach 1.5 million sq ft, compared to 2.32 million sq ft in 2022 and a 10-year average of 2.57 million sq ft.
HWBC expects pressure on headline rents and lease terms as new Grade A+ space becomes available.
Circa 3 million sq ft of new office space is expected to be completed by the end of 2024, leading to an increase in supply and a rise in vacancy rates.
Paul Scannell, head of offices at HWBC, commented: "We anticipate a market sentiment shift in the first half of 2024 as capital values stabilise, and new supply slows down.”
Top Five Office Deals - H1 2023
| No. | Property | Size (sq ft) | Tenant | Sector |
| 1 | Haymarket House, Smithfield, D7 | 79,600 | NTA | Government |
| 2 | Cadenza, Earlsfort Terrace, D2 | 39,200 | KKR | Finance |
| 3 | Termini, Sandyford, D7 | 30,500 | Jacobs | Professional Services |
| 4 | 4. Harcourt Square, Harcourt Street, D2 | 27,100 | KPMG | Professional Services |
| 5 | 2 Stemple Exchange, Blanchardstown, D7 | 22,900 | Synopsys | Technology |
Headline Office Rents – H1 2023
| CBD (Grade A) | €57.50 - €65.00 per sq ft (NIA) |
| Suburban (Grade A) | €30.00 – €34.00 per sq ft (GIA) |
| Car spaces: City | €4,000 pa per car space |
| Case spaces: Suburbs | €1,750 - €2,000 pa per car space |
