Q4 2021 Dublin Office Market Overview

Our Q4 2021 Dublin Office Market Overview is out now.

Rapid re-opening of the economy set to boost the office market. Knight Frank forecast a big increase in demand for office space, an increase in prime rents as delays to the supply pipeline take a toll and the economy and employment growth out pace expectations.

Prime Dublin office rents to reach €62.50 psf by mid-year and €65 pft by year end.

– 50% of supply due to complete in 2021 has been delayed to 2022.

59% of new space due to complete in Dublin city centre in 2022 is already pre-let.

Dublin’s office occupier market had a very strong finish to 2021, with KPMG’s decision to take 290,000 sq ft of space at Harcourt Square the largest deal of the quarter and the year. A deal of this scale reflects not only the strength of the Professional Service sector, but the confidence of the sector in Dublin’s office market and in a vision of the future office as the new space will complete in 2026.

The second largest deal was TikTok’s decision to take The Sorting Office, reflecting confidence from the TMT sector, which took 37% of all the space let in Dublin’s office market in 2021.

Considering the levels of lockdown throughout 2021, total take-up of 1.6m sq ft is an excellent outturn. Given the level of employment creation (almost 52,000 jobs) in key high value adding sectors, such as TMT and Professional Services, we expect that there will be pent up demand in the office market for office space.

Q4 2021 Dublin Office Market Overview  Cover

This along with a 50% delay to the completions pipeline between Q1 2021 and Q1 2022 is set to see prime rents increase to an estimated €62.50 psf by the middle of 2022 and to €65 psf by year end. Adding in rapidly increasing inflationary pressures and ongoing supply chain and labour market issues and the risks are on the upside.

The vacancy rate has peaked and has fallen to 9.8%. Space on the grey market, which increased at the beginning of the Covid crisis in March 2020, has seen a 11% fall and is expected to continue to decline.

The office market has been on hold for almost twenty-four months and the government’s announcement that restrictions are being swiftly lifted sets the scene for a potential race for space, particularly in the city centre.        
                          
Joan Henry
, Chief Economist & Head of Research, Knight Frank Ireland

Please click on the link below for our Q4 2021 Office Market Report. 

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