A recent study conducted by JLL Ireland reveals a significant increase in leasing activity within Dublin’s office market during the second quarter of the calendar year. Compared to the same period last year, the amount of leasing shot up more than two-fold and exhibited a 335.4% growth over the first quarter of the year with a total of 919,000 square feet rented.
Payments group Stripe negotiated the largest deal of the period with 156,000 sq ft of office space at Wilton Park One, the largest leasing agreement since Q4 2022 and a significant expansion from the largest deal in the initial three months of 2024.
By mid-2024, leasing volumes reached 1.1 million sq ft, aligning with long-term averages and slightly below the decade-long average for the first half-year, according to JLL data.
Almost a third of all leasing transactions in the most recent quarter were dominated by the education, health and social sectors, with tech companies representing 27 percent of all leasing activity. The most robust leasing activity was in Dublin 2, which accounted for 54 percent of leased volumes, and Dublin 4 at 27 percent followed up, with M50 South contributing 10 percent.
Despite the rise in leasing activity, Dublin still experiences a substantial 15.7% vacancy rate. The total vacant supply has risen to 7.6 million sq ft, indicating a 0.3% increase from the last quarter. Upon discounting reserved spaces, the vacancy rate reduces to 14.7%.
As predicted by Niall Gargan, JLL Ireland’s Research Head, there’s a potential decrease in the numbe of properties entering the market from around 2027. Currently, about 3.6 million sq ft of property is under construction, with an expected completion of 1.6 million sq ft in this year’s second half.
Rental prices for new Grade A buildings in central Dublin currently range between €58 to €62.50 for each square foot, while structures outside the city core seek rates from €27.50 to €32.50 per square foot, as per the report.
Despite a tough beginning to the year, the Dublin office sector impressively rebounded in the second quarter, delivering results above anticipations,” stated Mr Gargan. “The lease operations in Q2 were so strong that the total for the first six months nearly eclipsed the total annual volume that was marked in 2023.”
He mentioned that the impending signing of several major agreements in the second half of the year would probably push the annual total comfortably over two million square feet.