The third quarter saw robust activity in the Dublin office market. However, of particular interest, there has been a reduction in the level of immediately available office space, with office availability levels falling to 2002 levels. The tech sector remains the dominant sector in acquiring office space to date, followed by financial services and professional services. Vacancy level continues to decline with an overall Dublin vacancy rate of 8.8%.
Much of the activity in the first half of the year has been Dublin centric, combined with this most openings have been Food & Beverage (F&B) focused across the major shopping centres and on prime high streets. There is no doubt the impact of ongoing Brexit negotiations is certainly being felt in the Dublin and Irish market. However, there remains a healthy demand for retail requirements, including fashion, F&B and leisure. This is particularly noticeable looking at the Dublin market.
The market continues to perform strongly, with demand steady across all features of the market. However, a lack of good quality available stock continues to be an issue. Occupiers seeking modern buildings will be subject to prime rents, but also may have to sign up to greater length terms than they would prefer. A lack of supply is putting pressure on contract driven occupiers who are unwilling to commit to long term leases.
Q1 2022 shows a renewed investor appetite for hospitality assets in a "post-pandemic" tourism market. Robust transaction activity was recorded for the hospitality sector in the opening three months of the year, with a total of €73.1m achieved across 6 hospitality assets. This level of activity represents a significant improvement on the mere €9.8m recorded in Q1 2021, but importantly also represents an increase on the level recorded pre-pandemic in Q1 2020 of just shy of €60m.
Get the full Ireland property market picture with all the market data by downloading the reports.