MEDIA AND TECHNOLOGY firms like Facebook and Yahoo were responsible for almost half of the new office space let in Dublin last year as rental rates for prime space up around 15 per cent.
Research by commercial estate agents HWBC shows that Facebook’s new office in Grand Canal Square was the largest office deal in the capital last year at with Yahoo’s new office in the Point Village coming in at number 7.
In total, tech outfits took 42 per cent of the let space in 2013, with financial services the second biggest sector at 27 per cent.
The new Deutsche Bank headquarters was the second largest Dublin office deal in 2013 with the occupancy of law firm William Fry, also at Grand Canal Square, in fourth place in the listing according to HWBC.
(Source: HWBC Office Market Annual Review)
The review also predicted that rents for prime office space in Dublin will rise by 10 per cent this year, following on from a 15 per cent increase in 2013.
“Whilst international firms have been the drivers of the recovery in the Dublin office market we anticipate more active domestic demand in 2014,” said HWBC’s Paul Scannell.
“A number of Irish professional service firms are reviewing their space requirements and with quality office space now in short supply further capital and rental appreciation are expected this year.”
The review also pointed towards a positive trend in the vacancy rate with the amount of vacant office space falling for the third year in a row and now down to 2008 levels.
The vacancy rate in the Dublin office market was 17.5 per cent in 2013, down from 18.4 per cent the previous year and from a peak of 22.75 per cent in 2010.
The positive signals have led to HWBC predicting that office construction may experience a pick-up this year with some investment expected:
“Rental levels of prime new developments are likely to reach levels high enough to justify investment in new development. You can expect cranes and building activity to become a more common sight in Dublin this year after several quiet years,” said Scannell.