Ireland’s Dublin office market is holding up with a healthy first quarter take up despite a wider economic downturn in the country.

CB Richard Ellis in its Q1 2008 Dublin Offices report said there had been 484,380 sq ft of office take-up in the first three months of the year which is 10% higher than the five-year Q1 take up average. It said almost 70 office lettings were signed in Dublin since the beginning of the year but noted that lease negotiations were ‘understandably proving more protracted in the current economic climate, with occupiers proceeding cautiously’.

Supply pipeline

It said there was a healthy supply pipeline with more than 3.8m sq ft of vacant space and a further 1.8m sq ft of new space due for completion this year and a further 1.4m sq ft completing in 2009.

CBRE’s director of research Marie Hunt said: ‘New office developments that have not yet broken ground could be put on hold given the current market environment. Therefore, making assumptions about the quantum of new office accommodation that could potentially come on stream in 2010 and beyond is highly speculative. More rigorous assessment of new office schemes is a welcome outcome of the current funding crisis as this will prevent oversupply and sustain rental values, even if occupier demand starts to ease. We are encouraged that demand is currently running at more than twice 10-year-average take-up levels in the capital.’

Investment hit by lack of funding

On the investment side CBRE said that only five office investment transactions had signed in the first quarter of the year because of ‘a lack of funding arising from the global credit squeeze that has stalled activity across Europe in recent months, a trend that is very evident [in Ireland]’. It said prime office yields in the market have moved out as investor sentiment had cooled and prime office yields are now 4%.