Dublin, out of 21 locations in the UK and Ireland, experienced the most dramatic increase in prime office rents over the period 1999-2000 according to a report by property consultants King Sturge International, which is affiliated to Ganly Walters.
Dublin rents over this period soared by 27.4 per cent, ahead of London's West End, where rents rose by 26 per cent.
Edinburgh in Scotland came in third with a 22.5 per cent increase, followed by Cardiff in Wales and Bath in England with 20.5 per cent and 18 per cent respectively.
Belfast came third last of the 21 centres in terms of prime rents, which averaged £11 per sq ft. A letting to Fujitsu at 9 Lanyon Place, Laganside, at £13 per sq ft, set a record in the city. This compares to over £7 per sq ft in 1995. New and proposed schemes in Belfast are expected to provide a further 322,900 sq ft.
While Dublin heads the field in terms of rent increase, it comes sixth in regard to rents per sq ft, according to the report, which includes an update of the Dublin office market compiled by Ganly Walters.
The average prime office rent in Dublin is now £35 per sq ft (£26.66 sterling) with £42-£50 per sq ft (£32 to £38 sterling) being quoted in some locations. Suburban office rents are averaging £27.40 per sq ft (£20.94 sterling). This compares to rents of £15.97 per ft sq (£11.61 sterling ) in 1995, rising to £24.99 (£18.58) 1998.
London's West End continues to achieve the highest rents by a huge margin, where prime rents last year hit a staggering £85 sterling per sq m, followed by London's City market at £60 per sq ft. Reading, Edinburgh, Bracknell and Guildford in Surrey are closely followed by Dublin.
Total office stock in Dublin is estimated at more than 19 million sq ft and the take-up of office space in 2000 was just under two million sq ft. While available office accommodation at the end of 2000 was over one million sq ft, equating to a vacancy rate of 6 per cent, about half of this space is already reserved by tenants, giving a true vacancy rate of approximately 3 per cent.
The highest take-up of office space over the period occurred in central London.
Over three million sq ft of office space was under construction in Dublin at the end of last year and Ganly Walters reckons this upward pressure is "likely to continue in 2001 as factors such as rising building costs and a shortage of larger lot sizes lead to rental increases."
When asked if this could potentially pose a problem of oversupply in the market, he commented that while there is a considerable amount of office space coming on stream over the next two years "there is a major pent-up demand with many potential large space occupiers waiting in the wings to take up new space when it comes to the market".
"However, I feel that there may be a possibility that secondary space being vacated in favour of new modern block space might become less attractive for a while," Mr McDowell said.
Office availability in all the centres studied fell, with vacancy rates at the lowest levels for five years. The report concludes that a "lack of available new space is exacerbated by government policy restricting out-of-town and greenfield developments".
Business parks are a feature of almost all regional centres and whereas suburban or out-of-town rents lag behind those in cities and town centres in most locations, some business parks - in Reading, Exeter and Swindon - are achieving higher rents than in towns.
King Sturge, which has 14 outlets in the UK and is affiliated to Belfast company McConnell Martin, predicts slower rental growth in the UK over 2001, and an increase in demand for out-of-town business due to a shortage of prime office accommodation.
