Highest office rents on line!

Impact of LUAS and DART Proximity on Office Rents tracked by BNP Paribas Real Estate

A two year study byBNP Paribas Real Estate confirms the value of nearby public transport access as key a factor in higher office rents in Dublin.

Exactly how much rental return is achieved from offices in the central business district to the outer suburbs has been collated on a new map by the real estate firm. The research tracks recent office rental levels along the main Luas and DART public transport lines crossing Dublin.

The analysis found that rents along the Green Luas line command the highest premiums, ranging from €205 per sq.m in the suburbs to €646 per sq.m for prime CBD locations (central business district), especially in the Dawson Street, St Stephens Green and Harcourt Street areas in Dublin 2.

The Green Luas line, which runs from Cherrywood in south county Dublin and crosses the city centre before heading out to Cabra, accounts for three of the top five rental returns currently available in the city, the research indicates:

-Dawson Street(Luas Green Line) - €646 p.s.m (per square meter) / €60 p.s.f (per square foot)

-Grand Canal Dock(DART) - €614 p.s.m. / €57 p.s.f.

-Harcourt Street(Luas Green Line) - €603 p.s.m. / €56 p.s.f.

-Charlemont(Luas Green Line) - €592 p.s.m. / €55 p.s.f.

-Lansdowne Road(DART) - €581 p.s.m. / €54 p.s.f.

Rents on the Red Luas line range from €129 per sq.m in the west suburbs to €570 per sq.m in the north docklands

Similar analysis along the DART line indicates how valuable commercial districts have been established in close proximity to DART stations, especially around Grand Canal Dock and Lansdowne Road. Rents on the DART line range from €151 per sq.m in the north suburbs to €614 per sq.m in the south docks.

TheBNP Paribas commercial property map tracks average rents over the past two years for properties within a 10-minute walk of each station. It is based on a representative sample of ‘Grade A’ office lettings, the ‘best in class' new or refurbished office accommodation.

Lower rental returns, where office buildings are close to transport links, are predominantly suburban or located in city fringe locations. This represents a real opportunity for budget conscious businesses that do not necessarily need to be city centre based, the research authors maintain.

The lowest rents with good public transport provision were:

-Red Cow(Luas Red Line) - €129 p.s.m. / €12 p.s.f.

-Belgard Road(Luas Red Line) - €140 p.s.m. / €13 p.s.f.

-Sutton(DART) - €151 p.s.m. / €14 p.s.f.

-Tallaght(Luas Red Line) - €151 p.s.m. / €14 p.s.f.

-Fortunestown(Luas Red Line) - €172 p.s.m. / €16 p.s.f.

-Leopardstown Valley(Luas Green Line) - €€205 p.s.m. / €19 p.s.f.

Good public transport access is undoubtedly a factor in the value of office development and will have a significant impact on future office developments with the aim of achieving higher densities, according to Keith O’Neill, who is Head of Office Agency at BNP Paribas Real Estate.

“Employers need access to the best talent, and their mission to secure and retain employees is facilitated where they can offer highly accessible office accommodation.

This new mapping of Dublin city and county office accommodation clearly highlights enhanced connectivity in the city centre, especially the Green LUAS cross city line, is proving attractive for investors and developers, Keith O’Neill says.

Accessible and affordable office accommodation out-of-town is also highlighted by the research.

Dublin city’s new transport facilities have prompted extensive refurbishment of existing office stock in the city centre, as well as a host of new office developments. Where good public transport access combines with newly built or refurbished office accommodation that is spacious and custom-designed, then considerable demand from Irish and overseas business and investors is pushing rents upwards, the new data shows.

Next Stop: Prime Office Stock!

The city’s prime location for office space is Dawson Street, where the analysis shows average rents stand at €646 per sq.m. This is due to several brand new Grade A office schemes developed along Molesworth Street in recent years (One Molesworth Street, 10 Molesworth Street, 40 Molesworth Street, 32 Molesworth Street etc.), combined with the highly accessible and sought-after nature of this location for office occupiers.

Dawson Street is ‘super prime’ as an office location with immediate access to Grafton Street and all its bars, restaurants, hotels, and retail outlets. Businesses are attracted to this location largely for its role in retaining and attracting new employees, as well as the easier access for clients or customers.

The south-side remains the most popular suburban location with office rents at the Stillorgan, Sandyford and Central Park Luas stops ranging from €248 to €291 per sq.m. Rents decrease to €205 per sq.m at the Leopardstown Valley Luas stop, due to a lack of office stock in this location. Moving further south rents increase again to €280 per sq.m at Carrickmines, thanks to new lettings at the Herbert and Hyde Buildings at The Park, Carrickmines. The Carrickmines retail park is also a big attraction for staff.

Coastal office stock continues to be boosted by the DART line, right along the route through the north and south suburbs and city centre. Bus links and the Red Luas line connection at Connolly Station also facilitate commuter movement, according to Keith O’Neill of BNP Paribas Real Estate.

“Well-connected to the main business districts, the DART also passes through regeneration areas such as the Docklands where a large amount of new office stock has been delivered recently, largely because of the proximity to public transport”, O’Neill says.

The highest office rents along the DART line are in the Grand Canal Dock area (€614 per sq.m), while lower but still substantial rents in the region of €258 per sq.m are being achieved near the Clontarf Dart station at Eastpoint Business Park.

Similarly, a number of new developments are being delivered in Blackrock, also well served by DART, which is enhancing the attractiveness of the location for office occupiers. These include the Friends First redevelopment of Enterprise House and Trident House, both of which have been recently leased to Zurich Life Assurance.

Average rents for offices near the Lansdowne Road DART station have increased to a level that is on par with the prime CBD locations of St. Stephen’s Green and Harcourt Street.

“The increasing attractiveness of Ballsbridge for tech and aircraft leasing firms, such as Facebook and Avolon, sees average rents in Ballsbridge now stand at €581 per sq.m, according to the analysis”, comments Keith O’Neill.

Office development activity has continued along the north and south docks, which are accessible via the Red Luas line, with new and refurbished schemes such as Dublin Landings, Dockland Central and The Exchange achieving rents in excess of €538 per sq.m. These now more accessible locations have become attractive since the end of 2017 when the Green and Red Luas lines linked up.

Luas connections have also made office locations in the west suburbs such as Citywest and Tallaght more accessible. However, due to the longer commute from the city centre, rents remain below €237 per sq.m and have been slower to increase in recent years.

Closer to the city, but still in the city fringe, rents at Heuston Station are averaging €366 per sq.m reflecting the location’s emergence as an affordable alternative to the city centre.

Office Rental Price Map