Companies are very eager to secure space in the capital...
A new report from Savills has seen a drastic increase in the practice of 'pre-letting' offices which are yet to be constructed.
The phenomenon peaks in Dublin 2 and Dublin 4 where demand for offices is so high that 'pre-lets' account for 61% of the market.
'Capital Dock' is one of the developments currently being built in central Dublin
Across the city as a whole, they make up 44% of the market.
The report notes that the "proportion of pre-lets in the market has steadily increased over the last two years."
Commenting on this trend Savills chairman Roland O’Connell said that pre-letting is emerging because it delivers benefits for all parties in the current market:
"Although enough 'Grade A' space is available to accommodate around 2,200 office workers, occupiers with large space requirements or very specific locational preferences are facing an increasingly limited choice of buildings. Pre-letting opens up a wider set of possibilities for tenants and some are willing to forego immediate occupancy in return for buildings that tick the right boxes in terms of location, fit and finish."
Savills also notes that signing up tenants can be a vital factor for developers when convincing banks to provide financing for projects. It adds that these spaces are often let at discounted rates.
As more developments come on the market, Savills expects fewer companies to rent space in unfinished projects.