THE DUBLIN OFFICE market this year will achieve nothing like the record take-up levels seen in the past two years, according to a new analysis.
Activity is expected to reach about 190,000sq m (2.045 million sq ft) for 2008, close to the average annual level recorded over the past 10 years as a whole.
The report from Sherry Fitz-Gerald Group highlights, however, a very satisfactory level of activity during the first quarter of 2008, with take up reaching 67,500sq m (726,563sq ft), a 15 per cent rise on the same period in 2007.
The fundamentals of the market have changed, however, with the ongoing uncertainty in financial markets and a general downturn in economic activity serving to dampen sentiment.
Despite the bright start, these factors "are likely to impede activity levels during the remainder of the year", the report says, with take-up "considerably lower" over the remaining quarters.
Signs of an impending problem can be seen in figures provided in the report. The available office space in Dublin rose during the first quarter to 446,700sq m (4.808 million sq ft), helping to fuel a vacancy rate of 14.8 per cent at the end of the quarter.
And another 294,900sq m (3.174 million sq ft) of accommodation is under construction, with the report pointing out that most of this total represented "speculative development".
Vacancy rates are expected to continue their upward trend as this accommodation flows onto the market.
Although cyclical factors cannot be discounted as a factor, instability in the international banking sector may be a key contributor to the report's finding that just 7 per cent of all take-up in the first quarter was occupied by the financial sector.
The professional sector remained the most active segment of the market, the report states.
The suburbs accounted for the majority of take-up, accounting for 51 per cent of the total, with Leopardstown and Loughlinstown both active. The prime Dublin 2 and 4 districts claimed another 36 per cent and 12 per cent more was in areas close to south central Dublin.
