Business

Irish office rents among best performing in Europe

City Quays officially opened its doors last month

BELFAST and Dublin saw some of the most significant rises in office rents over the first half of the year.

Property agents Colliers International recorded a 7 per cent rise in Belfast but rates in Dublin were up a quarter - the best performance on any major city in Europe.

Other cities which reported significant rises were Bratislava, Manchester and Lisbon.

Ian Duddy, director at Colliers International in Belfast said: “For the past 12 months Belfast has shown its office market is on the up, due to a confident market, strengthening economy and shortage of good quality space, something that is likely to continue.”

This year saw the opening of new grade A offices at City Quays in Belfast Harbour estate.

That building - the only top grade office accommodation to complete this year - has been let in part to law firm Baker & McKenzie.

Work on sister block City Quays 2 is due to commence in the autumn.

Meanwhile, there are plans to convert the former First Trust bank at Queen's Square in the city to top class offices.

Paris-based firm Stargime plan an 80,000 sq ft building which it is understood will be leased to an international financial services company when it opens in 2017.

The company bought the site for £2m last year and plans have been submitted to convert the building which has lain vacant since 2013.

Earlier this year, Invest NI announced proposals to help fund developments in the face of a scarcity of grade A accommodation in the city.

Colliers said office rental values in the first six months of 2015 had been "in keeping with a generally more benign economic environment", particularly in western Europe.

In the UK, occupational market strengthened further. Prime office rents grew in the City of London (3.8 per cent), Manchester (4.6 per cent), Edinburgh (3.6 per cent) and Bristol (1.8 per cent), while they were stable in London's west end and Birmingham.

Bruno Berretta, senior research analyst, Colliers International said: “Provided that the Greek situation (and the handling of it) doesn’t derail the economic recovery, in the next 12 months we anticipate rents to continue to reflect the recent economic dynamics. Increases are expected in Dublin, all the key UK office markets and parts of southern Europe (Madrid, Barcelona, Milan and Lisbon), even if mostly confined to key office areas in the latter region.

"In southern Europe, the search for yield and a more upbeat outlook have prompted investors to venture deeper. The region’s key office centres have seen pricing adjust accordingly: in the first six months of the year, prime office yields hardened by 30 bps in Milan and Rome and by 25 bps in Madrid and Lisbon.”

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