The latest figures show an impressive 130% increase on 2006 during a period of concern for Ireland's construction sector as house building begins to hit a slump.
While 2007 has been the second strongest year ever for building, 2001 being the best ever, the office construction projections for this year are much stronger than previously anticipated.
By 2009, a further half a million square metres of extra office space will be completed with three quarters of the completions by the end of 2008. This results in a 24% growth on this year, which is good news for the dulling market.
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Dublin still remains an area of high demand for large retail units, especially Grafton Street where rents now stand at €10,000 per square metre. Further evidence of this strong and continued demand on the street was shown by the €1.4 million premium paid for the former Jigsaw unit by fashion retailer Ted Baker on Dublin’s main high street. These positive indications have allowed builders to remain quietly confident.
Dr John McCartney, head of research at Lisney said: "Indications are that developers remain confident of finding occupiers for good quality office space. Despite recent surveys suggesting that builders' confidence is down, our figures indicate that 76% of 2007 office output was built on a speculative rather than a pre-let basis."
Although office building represents only 25% of commercial building, in turn accounting for just 12% of all construction, other positive signals are pushing through. interest rates have been on hold since June and are unlikely to increase again in the foreseeable future. This will lead to further improvements in housing affordability, which is 10% better now than it was at the beginning of 2007 due to a combination of rising incomes, tax relief, stamp duty reductions and declining house prices. It is hoped these changes are signaling a reinvigoration of house building and a resurgence in the market in the near future.
(DW/JM)
