DUBLIN, Feb 12 (Reuters) – Rents for prime city centre office space in Dublin fell by up to 10% year on year in 2020, according to two surveys, as disruption from the COVID-19 pandemic halved the number of new lettings compared to 2019.
Rents fell below 60 euros ($73) per square foot for the first time since 2016, property agent HWBC said on Friday, a drop of around 10%. A separate survey from property consultancy Knight Frank put the annual fall at around 8%.
HWBC said the take-up of new space fell to its lowest level since 2012 – when Ireland was midway through an EU/IMF bailout – as firms postponed long-term letting decisions.
The reduced demand also led to a rise in the vacancy rate and an increase of ‘grey’ space coming to the market, HWBC said, referring to companies looking to sub-let excess space that is surplus to requirements.
However, it expects the declining market to be short-lived, pointing to multinational companies, including Amazon, Dropbox, Mastercard and Slack, accounting for seven of the ten biggest deals in 2020, despite the increase in remote working.
“Investors and potential occupiers face a narrow window of opportunity to strike before the appetite to acquire and lease space returns with a vengeance in the second half of the year,” HWBC Managing Director Tony Waters said, linking the return in occupiers’ confidence to the rollout of COVID-19 vaccines.
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