Q1 2023 saw 281,913 sq ft of office space taken-up in the Dublin market. There were forty-two deals closed, with the top five making up 48% of total take-up.
A key feature of activity in Q1 2023 has been smaller deal sizes, reflecting the caution that is currently prevailing among occupiers looking for larger spaces, as they assess their requirements and budgets.
While prime city centre rents ended 2022 at €70 psf, we expect some downward pressure to the mid-€60s level. After that, enhanced incentives and rent-free terms are expected to keep a floor on rents as developer/landlord costs to meet the required sustainable credentials balance the rental equation.
The market at this point of 2023 is filled with contradictions. Strong economic growth, employment, and demand are set against an increase in the supply pipeline, which will contract again in the short to medium term amid a more difficult funding environment.
2023 is set to be an anomaly given the spike in the amount of space available to sub-let, particularly since the middle of 2022
Occupiers ready to act this year will have a greater selection of new space to choose from in the city centre than has been the case for some time.
Beyond 2023, the delivery pipeline contracts. Some projects have been put on hold while others are facing more complex funding processes.
Joan Henry, Chief Economist & Head of Research, Knight Frank Ireland
