As we are now halfway through the year, we wanted to take a look at demand in the Dublin office market over the past 6 months and how this compares to 2022. Our mid-year review found that despite the slower broader office market, there was a significant growth in the leasing of serviced office space in the first half of 2023, with a 69% increase in the number of desks leased in H1 compared to same period last year. This surge demonstrates a growing confidence in flexible office solutions, particularly amidst an evolving business environment.
Key trends in the Dublin flexible office market for 2023 include a shift in locational focus, term length, and sector distribution. Dublin 2, due to its combined public transport links and adjacent social amenities, continues to be the hotspot for flexible office demand, with nearly half (45%) of all deals signed to date occurring in buildings on or around St. Stephen’s Green. This is up from 33% in the previous year. Fitzwilliam Square followed next, capturing 18% of deals. Subject to the length of term and quality of the space available, the average desk rate for deals signed year-to-date stands at €580.00.
The term length of license agreements also saw a substantial increase from an average of 15 months in 2022 to 21 months, so far in 2023. This jump underscores a rising confidence among businesses in the long-term viability of flexible office solutions.
In terms of sector breakdown, the tech industry, which dominated the flexible office space last year with 66% of deals, currently accounts for 30% of the market. There has been a notable rise in the professional and financial services sectors, which have respectively taken up 25% each of the flexible office space leased, up from just 12% last year.
"Although we saw a slow start to the year due to economic uncertainty and rising inflation, deal activity accelerated from February onwards. Average occupancy in flexible office buildings now stands at 87%, and we expect to see this continue to rise based on the level of interest we are observing from companies considering the flexible office sector as a practical real estate solution for their business." Kim Hogan, Workthere Lead for Ireland
These findings underscore the changing dynamics of Dublin’s flexible office market and the increasing appeal of flexible office solutions across various industry sectors.