The cynics constantly warn that if you can see more than a dozen cranes from your office window you are probably looking at the next property recession. It is too early to issue a similar warning even in out-of-town locations such as Sandyford where there are no less than 3.6 million sq ft of new office space in the pipeline. Although cranes are also piercing Dublin city's horizon, there is little speculative development in the inner city.

With few opportunities available for investing in established commercial buildings, institutional activity has largely been confined to pre-funding suburban office developments. And with inner city sites virtually non-existent, developers have rushed to embrace places such as Ringsend - an area shunned by the major players up until now. However, the shifting sands of property development have now deigned that the Grand Canal Docks is quite an appropriate place to pour millions of pounds into and once again the main players are competing for a bit of the action in this outer region of Dublin 4.

With Dublin Corporation anxious to see its rates revenue grow to meet the increasing cost of running the city, the planners can't wait to clear the way for several major office schemes rather than see the developers switching their attention to out-of-town locations controlled by the three other local authorities in the Dublin area. The competition for commercial rates between the four local authorities has developed sharply in the past year as each of them pitch for the new schemes before the property boom runs out.

Everyone knows the buoyant market cannot last forever - the last boom ran for four years - yet there are no immediate signs of a downturn in economic activity. The market is being driven by the high level of inward investment and the strong demand from overseas and indigenous companies for extra space.

Dublin's office market has traditionally been a cyclical business with several good years followed by long periods of empty blocks and stagnant rents. While the underlying problems remain, there has been a fundamental change in the overall structure of the market. There are now two distinct markets, one in the city centre, the other in the suburbs. Financiers are only too anxious to fund developments in the city because there are relatively few of them on the way at a time when rents have shot up to around £35 per sq ft for third-generation space. This same accommodation was hardly making £20 a sq ft less than two years ago.

IT is a different picture in the suburbs where a massive oversupply could quickly develop if all the speculative schemes are built. The 3.6 million sq ft earmarked for Sandyford alone is quite staggering considering that the total volume of office space at the moment in the greater Dublin area is only eight million sq ft. If other schemes planned for south Dublin, such as Cherrywood and Fassaroe (near Bray), are added in, then the total on the drawingboard on the south side of the city jumps to 5.1 million sq ft. And that doesn't take into account the very considerable number of developments either under way or planned along the M50 ring road on the western and northern sides of the city. Not surprisingly, there are already indications that the lenders are reluctant to pre-fund some of the developments for the simple reason that history has a nasty habit of repeating itself. One banker warned this week that lenders attracted by rising commercial values might be tempted to relax the basics such as loan-to-value ratios and income cover and "to take a bullish view on the likely strength of cash flows".

While some developers may be having problems in finding lenders to fund new office schemes, such difficulties will quickly disappear if they manage to pre-let significant parts of their schemes. For that reason, the companies behind the largest suburban developments are all pitching for Eircom, Dell and a number of other major tenants who are looking for vast new offices. The intense competition between the various schemes obviously means that rents will be trimmed back to encourage the large corporate tenants to opt for their blocks. Such deals will serve to widen still further the gap between office rents in the city centre and the suburbs. Out-of-town rents currently range from £15 to £18 per sq ft - virtually half the level of new space coming on the market in the city centre.

The Dublin office market has inexorably developed into two distinct segments. Things will never be the same again.