Limerick’s office vacancy rate drops below 10pc level

Mixed use: Construction work is expected to start early next year on the Bishopsgate scheme being developed by Kirkland at Limerick riverfront

Donal Buckley

Thu 26 Nov 2020 at 03:30

Limerick’s office market received welcome news in recent weeks when Transact, the US education payment software firm, announced plans to create a new digital campus and international headquarters in Limerick.

It already has an operation at the Engine Building in Limerick City Centre but has not yet identified its future location.

Also welcome was news that the Beacon Hospital is seeking to locate a clinic in two floors of the former EY offices at 3-5 Barrington Street.

The latest Cushman & Wakefield report says that as much as 3,400 sq m of offices was taken up in the third quarter of the year, bringing to 8,850 sq m the total space taken in the first nine months of the year. Nevertheless, Ciara McCarthy, director at C&W’s Limerick office says take up for this year looks set to remain below the long run average.

“However it is encouraging to note that companies are progressing with transactions with approximately 34pc of available space either reserved or signed at the end of Q3 2020,” she adds.

Prime existing office space in the city centre which was built in the early 2000’s can achieve rents of €243 per sq m if it has good fit-out. However, newer modern stock in the city centre could achieve more than that. “There is no such stock currently available but the last deal done was for about €350 per sq m (CAT A).

Similar space in the suburbs can fetch €275 per sq m.

Local developer Kirkland recently completed demolition works on the riverfront site for its Bishopsgate development and the firm is expected to start construction work in the first quarter of next year on the next leed gold office building and 34 apartments on the site and this development will also include the refurbishment of The Bishop’s Palace.

Over the 12 months to the end of September, the amount of available office space fell 29pc to 39,150 sq m, reducing the vacancy rate to 9.9pc, which compares with the 17.2pc rate as recently as June 2018.

Of the available space, 54pc is Grade A standard of which the city centre accounts for 29pc, the suburbs 35pc and Shannon Free Zone 36pc.

In the first nine months, occupiers focused on city centre locations, which absorbed 71pc of take up. There is also demand for suburban and Shannon Free Zone offices.