The take up of Dublin office space received a welcome boost from the technology sector in 2011, with over 1.7 million sq feet leased.
Jones Lang LaSalle said last week that the capital had a lower level of take up in the fourth quarter at 344,437 sq ft compared to previous quarters in 2011. Total take up for 2011 was over 1.7 million sq ft, which is a significant increase over 2009 levels of 750,000 sq ft.
The dominant business sector was technology, accounting for 31% of take up in the last quarter of 2011, an increase of 18.9% from Q3.
“One of the most significant changes in the market in Q4 was the increase in demand for sublease accommodation which represented 41% of take up. Prior to Q4, there had been an aversion to subleases in the last three years as sub-tenants did not want to become embroiled in protracted negotiations and discussions with head landlords requiring sub-tenants to pay the passing rent rather than the market rent. There has been a positive shift in relationships between landlords and tenants which are now more collegial and result in both parties working together to get the best outcome for the property,” said Fionnuala O’Buachalla, Director Tenant Rep.
The average deal size this quarter was 7,029 sq ft with 90% of all transactions being less than 10,000 sq ft.
Deirdre Costello, Director Office Agency said that, with 86% of take up in third generation offices, it appears that there will be increasing pressure on landlords of older buildings to carry out good quality refurbishments if they want to compete with modern stock.
There is currently 7.62 million sq ft of vacant offices in the market, with 44.5% in the city centre and 55.5% in the suburbs.
Of the total stock available, 1.2 million sq ft was constructed pre 1990 and many consider this space un-lettable relative to the condition and specification, unless refurbishments have taken place. If you remove this stock from total available stock, the vacancy rate is 16.4%, said Ms Costello.