The office market recovery is now firmly established, with take-up rising quickly, vacancy rates plummeting and rents on the increase, according to new research from Lisney.

Such is the demand for offices going forward, that an additional 426,000-431,000sq m (4,585,421-4,639,241sq ft) of space will be required across the country by early 2008.

The research shows that the take-up of Dublin office space in the first half of 2006 was 131,570sq m (1,416,206sq ft), up 60 per cent on the first half of 2005.

The full year take-up for 2006 is expected to significantly outstrip the 2005 total of 206,248sq m (2,220,033sq ft).

Office vacancy rates are also falling, say Lisney, from over 21 per cent in the second quarter of 2003 to below 13 per cent presently.

But in Dublin city centre - where supply is much tighter - vacancy rates are around 8 per cent.

Given the combination of high demand and tight supply, rents are also rising sharply, with Lisney reporting average rents of €592 per sq m (€55 per sq ft) in the central business district of Dublin 2/4.

Based on FÁS forecasts for service sector jobs and new findings by Lisney's international partners, Cushman & Wakefield, that the average office worker is assigned 14sq m (151sq ft) of space, the report says an extra 426,000-431,000sq m (4,585,421-4,639,241sq ft) of office space will be required by 2008.

This would represent an annual increase of around 10.25 per cent - a significant acceleration from current rates of office supply growth.