Dublin Office Market Overview Q1 2018 Summary:
- A range of economic indicators make for a bright economic outlook.
- 747,835 sq ft transacted in Q1, making it the strongest first
quarter recorded this cycle Prime Grade A rents remain stable at €62.50 psf.
- 346,000 sq ft of new office space was delivered as a number of
landmark buildings reached practical completion.
- Asian buyers accounted for the largest source of capital for the
first time, comprising 46% of the market
Supported by a favourable economic backdrop,
the record level of occupier demand witnessed in
2017 showed no sign of abating in Q1 as the market
continues to expand at a fast clip.
Economy; The Department of Finance’s recently published Stability Programme Update 2018 is forecasting real GDP growth of 5.6% this year, which would represent
a very strong level of growth albeit lower than the 7.8% recorded in 2017. While GDP is the international benchmark for comparing economies across the world, it is useful to examine some alternative measures of economic activity due to the distorting effect foreign multinationals have in the Irish case. One such measure is GNP – which removes the profits of foreign multinationals and adds in Irish multinationals foreign profits – is also projected to grow by 5.6% this year, also slightly down from the 6.6% recorded last year.
Another measure is underlying domestic demand, which captures the trends in the domestic economy. This is forecast to rise by 3.9% in 2018, up significantly from the 2.6% recorded in 2017. Underlying domestic demand is closely related to trends in the labour market, with the Department forecasting growth of 2.7% in employment in 2018, close to the 2.9% recorded last year. This growth rate would represent the addition of 60,000 new jobs in Ireland by the end of the year and bring total employment to 2.254 million – surpassing the previous peak of 2.252 million achieved in 2007.