Prime office rents in Dublin are forecast to rise in the 12% to 31% range in 2015 after a 29% surge in 2014 according to Society of Chartered Surveyors Ireland.
The organisation's Annual Commercial Property Review & Outlook 2015 published today says that SCSI members reported that the Dublin Region office rent for prime ‘grade A’ offices in 2014 was €452 per sqm (squarer metre) in 2014, representing an increase of up to 29% on 2013 prices. Average prime ‘3rd Generation’ offices fetched €389 per sqm, conveying a 13.7% increase.
Dublin-based SCSI members expect a 12% increase in rents by year end on prime “grade A” office space, but with an acute shortage of space in this market segment, that figure could well be exceeded and today's report says industry experts anticipate prime “grade A” office rents to hit €592 per sqm by year end if the positive economic growth trends continue.
"A further increase in 2016 to €645 per sqm is not unrealistic if the economy continues to grow."
In early 2006, the craziest year of the Irish property bubble, Finfacts reported that CBRE said in respect of the Dublin 2/4 area and Dublin Docklands, it expected to see prime rents in these areas "escalating to between €592 and €645 per sqm before year-end."
In 2006 Dublin office rents rose by 43% as Irish public sector demand jumped; Dublin and Mumbai were the highest risers in the world. The prime rate in Dublin was at €823 per sqm
Eamonn Maguire, chair of the SCSI Commercial Agency Professional Group said “The increase in rents has been largely due to a lack of supply combined with higher levels of demand from domestic and international companies seeking new office space or to expand existing operations as we have seen several of the large Technology, Media and Telecommunications companies do in 2014.”
In the retail sector, capital values in Dublin’s Grafton Street alone grew by approximately 28% in 2014. Rents increased by 11.5% for prime rental in Dublin following declines in recent years as rental prices reached €4,491 per sqm. Respondents to the survey expect prime retail rents in Dublin to increase by 10% in 2015. In Connacht/Ulster, they are expected to increase by around 9% and in Munster and Leinster by approximately 5.5%.
© Copyright 2015 by Finfacts.ie