Offices: Renewed confidence in the office market has encouraged a move back to Dublin city centre. Kate McMorrow reports.
High vacancy rates and reduced rents in suburban locations have encouraged a move back to the city centre for Dublin's office users, according to new research by Dr Sunnhild Bertz, research and data manager with Lisney.
For many companies, the suburbs became a viable alternative to more expensive city centre space in the mid-1990s. According to Lisney's office director James Nugent, a favourable planning policy coupled with strong user demand and the availability of investment finance in those years made the suburbs an attractive location for office developers.
As a result, suburban office stock has risen to 62 per cent in the past eight years, with city centre premises accounting for just 38 per cent of the total stock. An oversupply has put pressure on rents, leading to softening yields and hampering investor interest.
This will restrict further suburban development and, accordingly, only 16 per cent of space currently under construction is located in suburban areas.
One exception in these trends is the south-east, particularly at Sandyford, where the completion of the Luas has strengthened office development prospects.
The renewed confidence in the office market since the beginning of 2004 has seen the return of development in the city centre, in particular the south docklands.
Further opportunities are likely to arise around Dublin port and Heuston Station, as well as from ageing city centre space vacated as a result of the planned civil service decentralisation.
