Market Report:The non-availability of new office buildings in Dublin with around 10,000sq m (107,639sq ft) of space has been highlighted by Roland O'Connell of Savills Hamilton Osborne King as part of its review of the property market.
One other agent specialising in the office market said that there are now eight enquiries for newly completed buildings of this size but none is available.
O'Connell said that there was relatively little new office accommodation in the city. Tenants had shown a willingness to pay higher rents and commit to longer leases, but had also tended to baulk when asked to commit to full term leases at top-end rents with no incentives.
In the small office sector, O'Connell said demand remained high to purchase own-door buildings right around the city. Purchase prices ranged from €4,850 per sq m (€450 per sq ft) in the north suburbs and city locations up to €7,750 per sq m (€720 per sq ft) in the top southside developments. "Well designed and properly priced schemes are continuing to sell well with significant demand from both owner-occupiers and investors," he said.
On the commercial investment market, the report said that extraordinary growth in rental and capital values in recent years was unlikely to be repeated in the short term. However, returns "are expected to be strong this year". Michael Clarke of the agency said that commercial property was the best performing asset class over the last 12 months with total IPD ungeared returns to September, 2006 of 30.3 per cent - outperforming equities and bonds, which delivered 23.1 and 0.7 per cent respectively.
Most investors, he said, borrow to buy property and, with the benefit of gearing, returns per euro invested in property were greater than those reported by IPD. This was the best overall performance the market had experienced since 1999.
