Rents falling in Dublin docklands | The Post

Rents have fallen dramatically in Dublin’s docklands, boosting the occupancy rates of many of the new office developments in the area.

This is to the detriment of more traditional office locations, such as Georgian Dublin, according to Marie Hunt, head of research at CBRE.

At the peak of the market, rent for the docklands area was around €65 per square foot, but some of the best office buildings are now being let at €30 per square foot. Offices in the docklands that previously cost €50 per square foot are now €20 per square foot.

‘‘The presence of Google and Facebook in the docklands, as well as improved transport links, has greatly helped its desirability as an office location," said Hunt.

Even though the investment market is dead, the occupier side of the market is booming because tenants are taking the opportunity to move into newer buildings at reduced rents.

‘‘In the past, they would have signed a 20-year lease, which probably had upward-only rent reviews and they were paying top dollar in terms of rent," she said. ‘‘Now the tenants are calling the shots and they are saying, ‘I’ll pay you x amount of rent, I want a ten-year letting and I want a break option at year five’. Because there are deals to be done, people are taking advantage of that and the take-up figures for offices are not that far off where they were during the boom."

But the downside of this is that a lot of older buildings are being left vacant as companies take up better offers in newer buildings in areas such as the docklands.

‘‘The vacancy rate in the Dublin office market is over 22 per cent, and there are some buildings that have been on that list for years," she said.

‘‘No matter what rent you charge for them, you are not going to get a tenant into them because they are basically obsolete.

That is why you see a lot of boards around Merrion Square, St Stephen’s Green and Georgian Dublin, because those types of buildings are not what the occupiers in the market today are looking for."

via sbpost.ie

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