An acute shortage in supply of office space in Dublin is expected to continue to drive rents up to the end of 2017, a survey has found.

According to HWBC’s office market review, rent levels for office space in the prime Dublin office market rose by 24 per cent in the 12 months to the end of June, due to an acute shortage of grade A office space. It expects rents to rise by a further 20 per cent in 2015 as access to funding for new development remains challenging.

The review shows that rates for prime grade A offices in Dublin city centre rose 10 per cent in the first half of the year to €50 per square foot (€535psm), and are forecast to reach at least €55 per square foot (€592psm) by year end.

“The continued rapid increase in rents is due to the fact that no new offices have been built in the past five years and, excluding pre-lets, there is less than 50,000sq m of new development under way in Dublin 2 and Dublin 4,” HWBC said.

As such, it is forecasting that rents will continue to rise until at least the end of 2017, when potential new supply will help the market stabilise.

Last week property investment company Green Reit said there is a risk Dublin’s office market will be oversupplied from 2018.