Office rents in prime locations in Dublin have fallen by as much as 40 per cent from their peak levels, according to a new report published today.
More than one-fifth of the office stock in the capital remains vacant, according to the latest CBRE Dublin Office Market View survey, with the vacancy rate increasing significantly year-on-year to 22 per cent compared to its previous 10 year average of 12 per cent.
The property consultants suggest that the first three months of 2009 may have represented the low point in the current downturn for the Dublin office sector, with a mere 10,000m2 of office lettings completed in the quarter.
In the last two quarters, activity in the office rental market has improved and a large number of small lettings have been agreed, albeit at rental levels and terms and conditions that are vastly different to those achieved during the peak of the market in 2006 and 2007.
The latest research shows that a total of 23,242m2 of office lettings were completed in Dublin during the second quarter while 24,892m2 of office lettings were signed from July to September.
Total take-up in the first nine months of the year in the captial now stands at 58,134m2, as against take-up of approximately 135,000m2 for the same period last year.
During the third quarter, 57 separate transactions were carried out, according to the survey. The city centre accounted for almost half of the lettings concluded in the Dublin office market. A further 22 per cent of office lettings were located in the south suburbs while a further 12% were located in the north suburbs of the capital.
CBRE said that while it seems as though the pace of rental decline in the Dublin market has slowed considerably, the property they believe that further rental pressures still remain, particularly for secondary properties.
