Dublin office rents are soaring partly because of a shortage of space in prime locations. The latest rental indices published by Lisney shows that rents for modern space rose by 14.3 per cent in the 12 months up to the end June, while rents in the Georgian sector increased by an unprecedented 22.7 per cent. The strong growth in rents comes after an extremely buoyant six months, when the take-up of space was almost equal to the entire volume of lettings in 1997.

Demand for prime retail outlets in both Grafton Street and Henry Street also remained strong and, according the Lisney study, rents increased by 5 per cent between January and June and by 10.5 per cent over a 12 month period. The rent increase in the industrial sector over a full year was more modest at 4 per cent, but while the take-up of space was impressive, companies tended to purchase rather than rent buildings. Lisney's composite index, reflecting the weighted average of the four sectors, rose by 5 per cent over the first six months of this year and by 13.6 per cent for the year as a whole.