THE office vacancy rate in Dublin has dropped to 4.7 percent of the total space available, according to Peter Stapleton of the Lisney estate agency. In his latest quarterly update on the office market, he reports that take up so far this year has reached 540,000 square feet, leaving 640,000 square feet vacant. Mr Stapleton estimates that a total of 564,000 square feet of new space is under construction in locations such as Custom House Plaza and George's Dock in the IFSC, Leopardstown, East Point, Beech Hill and Richview in Clonskeagh.

The report says that terms and rents have hardened over the last six months as the volume of available space has dropped. "Following a lengthy period when a considerable amount of difficult leasehold space overhung the market, terms have now settled into a more reasonable pattern. In many cases, the space was poorly fitted and with 10 to 25 years remaining unexpired on the leases. It is now well established that the great majority of tenants will not enter leases without break options occurring between 10 and 20 years. The most notable exceptions are in the IFSC and other quality locations where the costs and standard of development tends to be much higher. Where break options are encountered, tenants are prepared to pay for the costs incurred."