Record low quarterly take-up in Dublin’s office market, as lockdown prevents deals proceeding. However, there is c. 500,000 sq ft reserved, almost 240,000 sq ft of which was reserved in Q1.
25% of new office supply due to complete in the city last year has been delayed until 2021.
Investor appetite remains strong against the backdrop of difficult market conditions, with US and German investors continuing to seek office and PRS assets.
The Dublin office market has recorded the lowest level of take-up on record, which in one way is no surprise given that the economy and society have remained in lockdown longer than had previously been expected. That said there was just over 200,000 sq ft of space reserved in Q1, which when added to space reserved in 2020, equates to almost 500,000 sq ft. The time involved in closing deals has stretched considerably, with deals taking anything from four to six months longer to complete.
The pace of office completions has also slowed, with most developments facing a six month completions delay and new projects due to start, delayed by at least the same amount. 25% of new space in city centre developments which was due to complete in 2020, will now not complete until 2021, with a risk that some of this will be further delayed until 2022. When the market opens up again, the expectation is that demand for space in new, “ESG” buildings will be high, with a preference for quality space to lead activity for both occupiers and investors.