This year's take-up of office space in Dublin should easily exceed the record 1.4 million square feet let in 1996. Lisney's latest office report shows that with three months to go, the volume of space let has already exceeded 1.2 million square feet.

Several major transactions due to be completed in the coming weeks are expected to push office letting close to 1.5 million square feet for the first time. On paper, there is still 600,000 square feet available outside the International Financial Services Centre but the reality is that much of this space is already the subject of negotiation.

The current vacancy rate is down to around 3.6 per cent, the lowest level since 1989. This figure will drop further until a number of new buildings currently under construction are ready for fit-out early next year.

Peter Stapleton of Lisney says that to meet the widespread demand for office space, developers are seeking planning permission to develop out-of-town office parks. Apart from developments due to take place in the IFSC and the Dublin docklands, there are likely to be schemes in Cherrywood (Loughlinstown), Sandyford, Tallaght, Clondalkin, Blanchardstown, Finglas and Swords Road.

He says there would be a continuing shift to out-of-town locations because of the much improved road network. However, suburban rents would be kept at a "reasonably modest level".

The continuing difficulty of developing city centre sites should mean that rents in these areas will rise more rapidly than others.

Two of the beneficiaries will be the ESB Pension Fund and G. & T. Crampton, which are developing three blocks with a total floor area of 96,000 square feet.

Lisney does not make any reference to the likelihood of a substantial part of this scheme (28,000 square feet) being pre-let, presumably because it is one of the letting agents. In fact, Norwegian State-owned oil company Statoil is negotiating to take one block and part of another at a rent of almost £18 per square foot.

In west Dublin, work is well advanced on Tallaght Plaza, where 70,000 square feet will be available on three floors. Also in west Dublin, IBI is pre-funding a number of buildings at City West Business Park, the first of them a unit of 30,000 square feet, which is available at £12.50 per gross square foot.

In south Dublin, construction has begun on a 250,000-squarefoot scheme on the former headquarters site of the Jones Group at Clonskeagh.

The most notable lettings since the beginning of the year were at Charlemont Exchange where ACC Bank acquired 66,000 square feet; at the Earlsfort Centre where solicitors Arthur Cox agreed to take over the 55,000 square feet of accommodation occupied by Lifetime assurance. Citibank took a short-term lease of 55,000 square feet in Fleming House at Baggot Street before making a commitment to move to more than 200,000 square feet. Other big takers were UPS, which rented a further 50,000 square feet to support its facility at Tallaght and Kindle, which exercised its option to occupy an additional 42,000 square feet at East Point in addition to its existing accommodation of 64,000 square feet.

Lisney reports that the final office buildings in the original IFSC area will be completed shortly after Christmas. Two of these, Numbers 5 and 6 Custom House Plaza, will have total of 56,000 square feet, while Number 6 George's Dock will have 52,000 square feet.

Mr Stapleton said that with 1.2 million square feet of office space in the IFSC already completed and occupied, the development would continue to thrive underpinned by a 12.5 per cent tax rate proposed from the year 2005. The huge complex would act as a catalyst for the development of further office space in the docklands area. Much of this would be used by international companies for "back office" operations.