- Q2 saw a significant increase in letting activity bringing take-up for the first half of the year to 1.1m sq ft.
- Larger deals led activity in Q2.
- 90% of the companies that signed deals for office space in Q2 were taking larger spaces.
- Record completion levels of 1.55m sq ft in Q2 have pushed up the vacancy rate to 15.9% which was expected.
- This quarterly increase is being driven by the delivery of a number of large schemes and is the last quarter that there will be such a strong level of completions.
- Knight Frank forecast that the vacancy rate will peak by year-end and decline into 2025 as the development pipeline tightens. There is no new office space due to complete after 2026.
- A continued improvement in occupier activity is expected for the rest of 2024 as a number of large requirements are expected to complete by year-end.
- Knight Frank forecast that total take-up will reach close to 2m sq ft for the year as a whole.
- Investment market activity also improved in Q2, although office transactions remain sluggish compared to some other sectors. The completion of one prime deal, the sale of 40 Molesworth St. to Deka for €37.5 million, was the most significant, providing evidence in relation to prime yields at this point in the cycle.
Joan Henry, Chief Economist & Director of Research, Knight Frank Ireland
