Office Take-Up Levels Across EMEA Up 11.8% On The Last Quarter.
Prime office rents in Dublin increased for consecutive quarters in the first half of 2013 (H1), the first time in six years the market has recorded growth. In the second quarter (Q2) prime rents in Dublin increased by 5.3% potentially indicative of an accelerating city office market recovery, according to the latest research from global property advisor CBRE.
Dublin’s prime rental market contrasts to most other EMEA markets where rents have typically remained flat over the first half of the year. Dublin has benefited from healthy levels of leasing activity this year with transactions across Q1 totaling over 400,500 sq ft, driven by its emergence as a technology hub (nine of the biggest ten technology companies are based in Ireland), low corporation tax rates and a burgeoning workforce which is young, educated and English speaking. Dublin’s rental growth is also responding to very low levels of available prime space across the city allied to a lack of office development during the financial downturn.
Office take-up levels in Dublin has also improved, exceeding 725,000 sq ft in H1 marking a 23% increase year-on-year, with evidence suggesting demand remains strong, particularly from the telecoms and technology (T&T) sector. Twitter, currently occupying serviced offices in Dublin, is looking for approximately 30,000 sq ft in the city and Facebook has stated its intention to recruit an additional 100 staff to its premises in Dublin Docklands. Such activity, alongside other recent deals including Investec securing 25,750 sq ft, Bloomberg taking 12,000 sq ft and Samsung agreeing terms on 9,000 sq ft is aiding growth in the city.
The aggregate trend across EMEA’s office markets has also improved, following a weaker first quarter of 2013, with an increase of 11.8% compared to Q1 and by 4% on the same quarter of last year. This turnaround has been helped by a pick-up in demand across a few select regions, namely Germany’s five core markets, boosted further by London and Moscow’s quarterly take up reaching around the 3.5 million sq ft mark, by far the highest level recorded in the markets since 2011. In contrast specific markets, including Paris and Madrid, have suffered from occupier caution with companies reluctant to commit to new leases or consume the capital costs of relocating, whilst the macro-economic climate remains uncertain.
Mark Caskey, Head of Global Corporate Services, CBRE, said:
Recent positive economic news appears to be boosting occupier confidence with total office take-up levels across EMEA improving markedly on Q1, with real momentum coming to the fore in some key markets, particularly Dublin. Whilst occupiers remain focused on cost management and wait for the wider economic climate to become clearer, this news is encouraging.
“Since the last quarter of 2012 we have also seen an emerging trend of increased leasing activity and take-up by T&T companies across Europe, with demand outstripping that of the banking and finance sector for the first time. We believe the T&T sector will continue to be one of the engines of economic growth and as the war for talent intensifies occupiers will gravitate towards established tech hubs driving prime rents in the process, as cited by Dublin.”