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Q1 2022 Dublin Office Market Report Released

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Dublin’s office market continued to perform well in Q1 with take-up reaching 481,230 sq. ft. across 45 lettings. This is almost ten times the level recorded in Q1 2021 and is the second-highest quarterly total recorded since the pandemic began.

Take-up and demand have been recovering well since the middle of 2021 as companies now move to activate post-pandemic space plans. Demand is concentrated in the city centre, spread relatively evenly across the traditional CBD, North and South Docks, which together accounted for 82% of total take-up in Q1. This contrasts with the ‘flight to the suburbs’ that some expected at the beginning of the pandemic. Instead, many companies large and small are adopting the hybrid work model but retaining office space in core locations where staff can attend to collaborate and meet with clients as required.   

Technology, Multimedia and Telecommunications (TMT) was the top performer again in Q1 with 56% of take-up, of which one quarter was attributable to FinTech company Fiserv’s letting of Ten Hanover Quay. There has also been increased activity among State entities and financial and professional services companies seeking to move into newer, more sustainable office buildings to meet internal ESG targets and policies. An example of this was the letting of 78,871 sq. ft. at the Exo Building, Dublin 1 to An Post, whose headquarters will be relocated from the General Post Office later this year. 

Office development activity is continuing at pace, with both Dockline (former New Century House) and Boland’s Quay reaching practical completion in Q1 adding a combined 400,000 sq. ft. of high-quality office space to the market. Dockline is mostly reserved which highlights the strength of demand, while Boland’s Quay will be owner-occupied by Google. The recent news of Workday acquiring a site for a new campus development in Grangegorman is very welcome and underscores Ireland’s continued attractiveness to global technology companies. Workday will join Google, who recently received planning permission for a major extension of the Treasury Building, along with LinkedIn, Salesforce and Meta who are all well advanced in developing their own campuses across the city.

Increased demand has seen vacancy levels continuing to contract gradually to stand at 10.2% by the end of Q1. If reserved space is excluded, this falls to 8.8%. The highest vacancy is being seen in the suburbs, where 11.6% of space is available, while in the city centre vacancy is at 9.1%. Of the more than 3 million sq. ft. due for delivery in 2022, 76% is already pre-committed which means we are unlikely to see any major spikes in vacancy levels as new developments reach completion.

Headline rents for Grade A space are stable at €60-€62.50 per sq. ft., but quoting rents have increased to around €65-€67.50 per sq. ft. and evidence is expected to emerge of rents at or above this level for the very best office space in the city. ESG factors are now a key determinant of rental levels and we expect to see further divergence in rents between new and older buildings this year. 

Occupiers are seeking to build flexibility into future space plans and reduce fit-out costs and lead in times to mitigate against further uncertainty. As a result, flex space operators have seen a surge in demand with many Dublin centres now close to full occupancy. This sector is continuing to grow, with both Regus and Pembroke Hall expanding in Q1. Flex operators, including WeWork who had traditionally adopted the coworking model, are increasingly offering personalised office suites on a flexible basis. This is attractive to expanding global occupiers and new entrants seeking to enter the market on a short-term basis with a view to expanding later. 

Large requirements also returned to the market in 2021 with several global tech, financial and professional services companies touring options in recent months. Many of these are being fulfilled now, and with more than 1 million sq. ft. reserved at the end of Q1 we expect to see continued recovery in take-up in Q2 and beyond as the office market returns to more normalised levels of activity. 


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Q1 2022 Dublin Office Market Report Released

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Kate Ryan

Director | Head of Research

Dublin

Kate is Head of Research for Colliers in Ireland. Kate's role involves tracking and analysing property market data and trends and producing market reports and commentaries across all sectors. Kate is also part of Colliers EMEA research team and provides Irish market data which feeds into EMEA reports, allowing for analysis and comparison of occupier and investment trends.

Kate is an Associate Member of the SCSI and holds an MSc in Real Estate from TU Dublin. 

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Paul Finucane

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Paul  has over 19 years in years experience in the commercial property sector and joined the Colliers team in  2004 folllowing a 3 year period at Allied Irish Bank Plc. He is joint head of the offices department in Dublin  and specialises in the acquisition of office space for incoming  multi-national companies. 

In 2019, Paul acted for LinkedIn in the largest office transaction of the year where they pre-let 3 office blocks in the CBD as part of their long term expansion plans in Dublin. This success has continued into 2020 where Paul acted for Slack in the largest city centre acquiistion year to date on behalf of Slack Technologies. 

Paul is a licensed professional and a full member of the Society of Chartered Surveyors Ireland (SCSI) and Royal Institute of Chartered Surveyors (RICS)

 

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Nick Coveney

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