Dublin Office Market Q2 2019 Overview

Dublin Office Market Q2 2019 : Despite a quiet second quarter, the first-half of the year sees the strongest-ever level of take-up.

Summary

  1. Macro weaknesses in the Eurozone economy increase the likelihood of further monetary stimulus.
  2. Dublin is expected to be the fastest growing capital city in Europe
    between 2020-2035, with it’s population predicted to rise by 18%.
  3. 355,000 sq ft transacted in Q2 to bring take-up at the half-way point of the year to 1.7 million sq ft.
  4. €257.1 million worth of office investment transactions changed
    hands in Dublin during Q2. A number of large sales are expected to boost volumes in the second half of the year.
  5. Our analysis of investment flows since 2013 shows the ownership structure of the Dublin office market to be globally diversified.

Overview

Economy: Industrial production in the Eurozone beat expectations in May, increasing by 0.9% on the previous month according to Eurostat. It was not, however, enough to drag the index into positive territory on an annual basis, with a contraction of 0.5% recorded compared to May 2018.

Dublin Office Market Report Q2 2019

While production in Ireland increased by 8.2% annually, Germany saw a 4.3% contraction as global trade uncertainty hit output with other large European economies also facing headwinds. Inflation also remains weak, standing at 1.3% at the end of Q2, well below the ECB’s target of close to, but under, 2%.
This softness in the economy means that accommodative monetary policy measures will likely be re-introduced in Q3 in the form of interest rate cuts and quantitative easing. This will place further downward pressure on sovereign debt yields – Ireland’s are already close to zero – and increase the relative attractiveness
of risk assets such as Dublin office investments which currently trade at a risk premia of 4.0%.

Click to read the Dublin Office Market Q2 2019 report in full.

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