A new report on Ireland’s property investment market reveals that almost €8.6 bn has been invested in Irish office property since the start of 2013, with 40% of its total stock changing hands.
Property advisory Savills found that over 1.4 million m2 of Dublin office space has traded in the last six years, reflecting both the positive environment in the Irish capital, and global investment trends.
'By any international comparison Ireland’s rate of job creation has been exceptional in recent years, and 30% of all the jobs created last year were Dublin office-based positions,' said Savills’ director of research, John McCartney.
'This has generated enormous demand for office space in the capital and, although new buildings are emerging, supply has been unable to keep pace. As a result the vacancy rate has been pushed to a 20 year low. Inevitably this underpins rents and values,' McCartney added.
Despite the strength of the investment case, Domhnaill O’Sullivan, director of investments at Savills, said that Dublin offices remain good value by international standards.
'Net yields – which measure a property’s ability to generate rental income relative to the price that has to be paid to buy the property – remain higher in Dublin than in many other European capitals, and this is also attracting capital,' O'Sullivan noted.
Although challenges presented by Brexit and US / China trade tensions remain, Savills said it expected the market for income-producing office assets to remain strong.
'With a global shift from goods to services, Dublin’s position on the western edge of Europe is no longer a barrier to trade. Increasingly this, and other factors such as favourable demographics and the widespread use of English are attracting space-consuming technology companies to the city,' McCartney concluded.
