With 2024 having crossed its halfway point, the transaction volume for office space in Dublin is projected to hit 1.1 million square feet, considering data from January to June end. The second quarter witnessed a substantial uptick in activity levels compared to the first.
In the first quarter of 2024, the lingering reservations from 2023 caused smaller deals to prevail. Companies took time to finalise their needs, slowing down the leasing pace. However, the second quarter saw a shift with larger transactions taking centre stage. Namely, the State’s acquisition of the remaining shares in Elmpark Green, Dublin 4, from Starwood, for Health Service Executive (HSE) use, marked the quarter’s biggest deal of 182,000 square feet. Stripe, the tech firm, committed to leasing 156,000 square feet at One Wilton Park, making it the largest tech transaction. Meanwhile, BNY Mellon struck the highest deal for a financial services firm by acquiring 79,000 square feet of space at the Shipping Office. An additional lease of 60,000 square feet was secured by APC, a leading med-tech firm from Ireland, in Cherrywood, marking a notable pre-let in the southern suburbs of Dublin.
Interestingly, nearly nine out of ten firms that secured office space agreements in Q2 opted for larger premises. This trend mirrors the robust job growth across various industries, a rejuvenated outlook and more definitive hybrid work strategies.
Despite expectations of the total office vacancy rate inching up in the upcoming months due to new constructions nearing completion, we maintain the viewpoint that it will plateau around the end of the year at around 16% to 17%. The underlying vacancy figures based on the city centre’s location and building sustainability features will be more intricate and significantly lower.
After reaching a zenith in 2024, the pipeline for office developments will noticeably narrow down. Presently, no new office constructions are scheduled to be completed post-2026.
The latter half of 2024 holds several opportunities for well-researched occupants seeking new establishments, especially in central city, where rents have levelled off at €62.50 per square foot. 2025 is anticipated to see rental rates climbing owing to mounting cost/environment challenges and surging demand.
A sustained uptick in occupier activity is projected for the remaining months of 2024, as many sizeable leases are set to culminate by the year’s close.
Knight Frank estimates that the year’s total transaction volume will be on the brink of the two million square feet mark.