Table: Top lettings 2024:
Property tenant sq ft
The Seamark Building, Dublin 4 HSE 182,340
One Wilton Park Stripe 156,000
Two Wilton Park EY +130,000
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This year was a turning point for the Dublin office market. A poor first quarter, where just 170,000sq ft was signed, was followed by a significant turnaround in the following six months, with 1.5 million sq ft transacting — more than what was let throughout all of 2023.
The last three months of the year will be another strong quarter, with total take-up for 2024 to come close to 2.2 million sq ft. Optimism regarding the economic outlook, supported by falling inflation, retreating interest rates and continued employment growth, along with growing efforts by employers to move the hybrid ratio towards greater in-office attendance, has facilitated greater corporate decision making about office relocation and expansion plans.
Occupier activity in 2024 was broad-based. Professional and financial services firms dominated activity with Deloitte pre-letting the 160,000sq ft redevelopment of the former AIB building on Adelaide Road. Elsewhere, EY and BNY took more than 130,000sq ft and 79,000sq ft respectively at Two Wilton Park and the Shipping Office. State occupiers were also active, with the HSE purchasing the 182,000sq ft Seamark Building.
The re-emergence of larger tech deals in 2024 was also encouraging. Workday chose College Square to house its mammoth 416,000sq ft requirement (expected to close in 2025), while Stipe took 156,000sq ft at One Wilton Park.
We are tracking well in excess of 2 million sq ft of active requirements which points to another strong year for occupier demand in 2025. The supply of new space will begin to rapidly decline from 2025. In 2026, 1.3 million sq ft is anticipated to be delivered — of which 53 per cent is pre-committed. In all, 51 per cent of the space that is under construction is pre-committed. No new space is due to be completed after 2026.
The tightening supply pipeline indicates that the overall vacancy rate has peaked; however given that it remains elevated at 15.1 per cent, occupiers would be forgiven for thinking that availability is not an immediate concern. However, the slowdown will impact availability more quickly than many believe. This is because a large portion of the space that is available is made up of dated or functionally obsolete space, while space that can satisfy changing tenant preferences is more limited. When available space without LEED credentials is excluded, the overall vacancy rate falls to mid-single digits, particularly in core locations such as Dublin 2.
Given the falloff in newly completed space, and the recovery in occupier demand, with a particular preference for best-in-class buildings, it would be prudent for occupiers not to wait too much longer before deciding on their next moves. We expect that prime rents will edge upwards in 2025, with more significant increases expected in 2026.
Declan O’Reilly is a director at Knight Frank.
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