According to CB Richard Ellis's (CBRE) EMEA Offices Market View for Q4 2006, leasing activity in the fourth quarter accelerated, with a number of markets registering take-up levels second only to those seen in 2000. Both Madrid and Paris recorded their highest ever levels of quarterly gross take-up.

This trend has also been witnessed in the Dublin market. Indeed, at over 202,000 sq m, the quantum of office accommodation let in the Dublin office market last year was the highest on record.

This level of activity has not been seen since 1998 when over 185,800 sq m was signed during what was the height of the technology boom.

Over 62,000sq m of office accommodation was let in the Irish capital in the last three months of 2006 alone, a factor CBRE attribute to exceptionally strong levels of demand from both Irish and overseas occupiers and strong job creation figures.

Even the suburban locations broke records, accounting for over 40% of letting activity in the Dublin market in the 12-month period.

"As a result of resurgence in office demand, the CBRE EU-15 Vacancy Index fell for the eighth successive quarter to 7.64% and so far the development pipeline has increased only marginally, " says Michael Haddock, CBRE's Director of EMEA Research. "Future supply is becoming a key factor determining the future performance of European offices.

The strong up-tick has been reflected in the direct investment market. Over Euro230bn of commercial property deals were transacted in 2006, driving the CB Richard Ellis Weighted Average Office Yield down to 4.94%."

The largest proportion of office accommodation let in Dublin was located in the prime Dublin 2/4 postal district and Docklands area of the city. Indeed, 41% of office accommodation signed in Dublin last year was located in the 2/4 market, where the bulk of demand is focused.

The overall vacancy rate of office accommodation in the city continues to decline slowly and finished 2006 at 10.4%, having declined from 11.2 % a year previously.

"It is encouraging that there appears to be no letup in terms of demand in the current Dublin market on the back of strong employment and economic conditions, " says James Mulhall, director of Office Agency at the property consultants. "We are aware of at least eight active requirements for as much as 9,290sq m of office accommodation. Against that backdrop, another strong year of letting activity is envisaged with a considerable amount of pre-letting activity in core locations".