THE FALL in rents over the past three years has allowed Dublin and Ireland to be repositioned as one of the more competitive locations for foreign direct investment, according to the latest report on the commercial property market by economist Marian Finnegan of DTZ Sherry FitzGerald.
She said rental levels in both the prime Dublin office and industrial markets had both fallen by 48 per cent from peak, which effectively brought Dublin back in line with competing cities such as Amsterdam, Birmingham and Edinburgh.
One of the biggest challenges that Ireland faced during the Celtic Tiger years was the erosion of our competitiveness.
The deflation in rents over the past three years coupled with our competitive tax structure and the strength of our labour offering should help underwrite our economic recovery.
Take-up of office space in Dublin in the first three months totalled 32,700sq m (351,979sq ft) – 73 per cent more than in the first quarter of 2010.
However, the report noted that this was underwritten by the sale of the Montevetro office block in Barrow Street to Google.
The IT/telecommunications sector proved the most dominant in the period, accounting for 71 per cent of newly occupied space.
Both Galway and Limerick saw lower take-up in the first quarter while Cork had an uplift in activity.
The report said the Dublin industrial market also experienced a relatively strong start to the year with ongoing improvements in both performance and confidence.
Commenting on the wider market, Finnegan said that despite the economic challenges that persisted there were pockets of the markets that were performing well in very challenging circumstances.
This was particularly notable in the prime office market in Dublin and the wider Galway commercial sector.
“That said, true stability in the market will only emerge with stability in the economy leading to employment growth and improved consumer expenditure.
Other uncertainties surrounding legislative changes are further compounding market nervousness at present.
All in all it is fair to say that 2011 is likely to remain a demanding year for the market.”
