Workday headquarters at College Square, Dublin
Dublin’s office market continued to recover in the second quarter of this year thanks to increased space being let in the city centre. According to the latest report from agents Cushman & Wakefield, as much as 61,000 sqm were leased in the second quarter.
This brought the office take-up over the past 12 months to 206,800 sqm (or about 2.2 million sqft) which is around the highest level seen since 2022.
A further 102,400 sqm of office space was also reserved in Q2, much of which relates to new offices being built. Tom McCabe of Cushman & Wakefield said: “The reserved space is a good indicator of forthcoming lease activity and is another sign of improving underlying health across the market. We are forecasting prime rents to rise to approximately €700 per sqm by year end – the first such forecast increase in a number of years.”
This is due to reduced availability, particularly in the central business district (CBD).
Incentives to tenants such as rent-free periods and free fit-outs remain a feature of most deals.
“But our sense is they are reducing as market sentiment improves and as the market itself tightens,” he said.
On the supply side, availability across the Dublin market remains elevated in the longer-term, but vacancy rates have peaked. Mr McCabe expects the CBD vacancy rate could fall to about 15.5pc in Q2 compared with 17pc in Q1 2025.
The future office construction pipeline also looks weak. At the end of Q1, only approximately 165,000 sqm of new office space was under construction for the entire 2025-2027 period compared with average Dublin office take-up of around 193,000 sqm per annum over the past 15 years.
Three-quarters (76pc) of this space was already pre-let or reserved – suggesting that the vast majority of this future supply will never hit the market.
Workday’s deal to take 38,700 sqm for its new EMEA headquarters at College Square in Dublin city centre accounted for 63pc of the Q2 office take-up.
Cushman & Wakefield, who acted as agent on that deal, points out that it was the largest single office lease in Europe since the Covid pandemic. The agent’s head of offices, Ronan Corbett, said: “This is also a significant vote of confidence, not only in the Dublin office market but also in the outlook for international investment in Ireland. Together with the latest trends we are seeing in our Q2 2025 data, the outlook is brightening for the office market after a difficult last few years.”
The other major lease of note this quarter saw Vodafone take approximately 5,900 sqm at St Stephen’s Green.
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