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Estate agents HWBC has said that the vacancy rate in the Irish capital has peaked and that over the next few months, it will fall, the Irish Times has reported.
Take-up of office space in Dublin during the last year has improved considerably according to HWBC. Compared to the same point last year there has been an increase of 60 percent.
However, over 35 per cent of this year’s take-up so far is represented by only two major letting deals. Google recently rented 19,500 square metres of office space and bookie Paddy Power has let 11,150 square meters.
According to HWBC, the current vacancy rate in Dublin stands at 21.5 percent. However, the real estate agent claimed that the abundance of old office space in the city has skewed the figure.
Ireland’s economy, with its high reliance on the financial services industry, was one of the worst hit by the financial crisis and the country was one of those given a large bail-out package.
However, recently investors have said that Ireland is the most likely of the bailed-out European nations to recover. A recent Bloomberg survey of economists backed the Irish economy to expand by 0.5 per cent this year.
The same survey showed that most economists think that the Greek and Portuguese economies will contract by up to 1.9 per cent.
However recently the Chief Economist of the Irish Bank, Dr Ronnie O’Toole, warned that a double-dip in the US economy and more trouble in the Eurozone could impact Ireland’s export market.
“A low-growth scenario for the coming two to three years seems increasingly likely in these markets,” he said.
Editor’s notes: In 2022, the total take-up of office space in Dublin was 233,820 square metres which was below the 10-year average of 240,000 square metres but was 60% up on 2021’s figure.
In the first quarter of 2023, the Irish Times reported that vacancy rates would likely peak at 15 per cent in the year from 12.4 per cent. It also reported that there had been a surge in subletting activity indicating that many occupiers were looking to downsize in the wake of remote and hybrid working practices.
It also stated that it is likely that the vacancy rate would then decrease in 2024 as development activity slows down and thus increasing the net absorption of space.