The Dublin office market, like all sectors of the economy, has felt the impact of Covid-19. Despite this, almost 1.5 million sq ft of space was let and € 1.2 billion was invested in office assets. The modernisation of Dublin’s office market over the last decade, through extensive new builds and renovations, has ensured that the city remains a location of global interest, with the TMT (technology, media and telecom) sector continuing to take considerable space, even in the midst of the pandemic.

Pressure on the vacancy rate was inevitable given the stop-start nature of economic activity since last March, with Dublin’s overall vacancy rate currently 9.5 per cent compared to 6.9 per cent at the beginning of 2020. The expected gearing up of the vaccine rollout programme, particularly from the second quarter onwards is expected to result in a bounce in demand for office space and create opportunities for both tenants and landlords to embrace the rapid changes that are taking place in not just the Dublin office market, but in all global city markets. Rental pressures have been inevitable also, with prime rents currently at €57.50 per sq ft compared to €62.50 per sq ft in Q1 2020.

Longer-term investor confidence in Dublin as a location is reflected in the fact that investor spend in Irish office assets totalled over €1 billion in 2020 (€1.2 billion) despite the practical restrictions faced by investors who have been unable to travel to view investment opportunities. Overall underlying investor confidence in Dublin as a location, coupled with the quality of office stock that now makes up Dublin’s office landscape, leaves the office market well positioned to adjust to the new demands and requirements that will emerge as the domestic economy opens up again throughout 2021.

Joan Henry is chief economist and head of research at Knight Frank