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HWBC says prime office rents in Dublin are set to top €70 per square foot by year-end and could reach €80 to support further new construction amid strong corporate demand and limited supply.
Dublin office rents are set to reach unprecedented levels as demand for prime space in the heart of the city continues to outpace supply, according to leading commercial property broker HWBC.
The firm has warned that rents will need to climb to a record €80 per square foot to justify the next wave of new commercial development in the capital. So-called prime rents are expected to top €70 per square foot by the end of the year, which would itself represent a new record for the Dublin market. At present, rents for grade A office space in the capital stand at approximately €67.50 per square foot.
HWBC director of agency and business Paul Scannell said the outlook for the second half of the year remains positive, particularly for prime energy-efficient space in the central business district as the supply of standing stock continues to be absorbed by corporate tenants. He added that recent developments are expected to be substantially leased or reserved by year-end.
Rents of €80 per square foot would be an unprecedented level for the Dublin office market, far exceeding the previous peak of about €65 per square foot reached during the Celtic Tiger era roughly two decades ago. While a small number of bespoke deals have occasionally gone above the headline rate for the city, few, if any, have come close to the €80 mark.
The broker also suggested that pre-lets, once a hallmark of the Dublin commercial property market, are likely to make a return as businesses seek to guarantee space in favoured developments before they are completed. About two-thirds of the approximately 800,000 square feet of office space currently under construction in the city has already been rented out, indicating strong forward commitment from occupiers. A new wave of building activity is expected to be needed to meet ongoing demand.
While office availability in the city centre remains tight, companies are increasingly taking more space outside of what was traditionally viewed as Dublin's central business district. This trend was illustrated on Tuesday when US technology firm Klaviyo announced it had signed terms to take space at One Le Pole Square near Ship Street in Dublin 8. The move highlights how occupiers are being pushed to consider locations beyond the traditional core as prime rents continue to climb.
The surge in headline rents comes despite a wave of so-called grey market office space entering the market, as large companies that had committed to significant amounts of space in recent years now seek to sublet or offload altogether at least part of their lettings. This secondary supply has so far done little to dampen upward pressure on prime rents, reflecting the strong preference among corporate tenants for high-quality, energy-efficient buildings in desirable locations.
The combination of robust demand and constrained supply of top-tier space suggests that rental growth in the Dublin office market is likely to continue in the near term, even as some larger occupiers attempt to rationalise their property portfolios. The broader picture for Dublin's commercial property sector points to a market in transition, with rising headline rents masking pockets of softer subletting activity.
Industry observers note that while headline prime rents are climbing toward record highs, the market is also seeing an increase in grey space, which could create opportunities for smaller occupiers or those willing to take on secondary space at a discount. However, for the most sought-after developments, the trend is firmly upward.
The return of pre-letting activity suggests that occupiers are willing to commit early to secure space in high-quality buildings, a signal of confidence in Dublin's long-term appeal as a location for corporate headquarters and technology operations. With demand continuing to absorb new supply and rental levels pushing past previous records, the Dublin office market appears poised for further growth, even as the wider economic backdrop remains uncertain
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