The last two transactions for large-size office space were to US gaming companies ZeniMax Online Studios and Electronic Arts

AFTER A robust performance in the second quarter, transaction activity in the Galway office market remained strong in the three months up to the end of September with 1,800sq m (19,375sq ft) of space transacted, according to a new report from DTZ Sherry FitzGerald.

This reflected a modest reduction on the strong performance in in the previous quarter but notably the volume of individual deals completed increased during the most recent period.

Marian Finnegan, head of research at the agency, said Galway continues to attract the best international gaming companies. The last two transactions for large size office space were both to US gaming companies ZeniMax Online Studios and Electronic Arts. Both companies acquired 4,650sq m (50,000sq ft).

However, a shortage of available modern office buildings to provide this floor plate requirement resulted in both parties looking at manufacturing facilities which required retrofitting to call centre/office accommodation.

The report also noted Hewlett-Packard is proposing to lease a new purpose-built office block measuring 9,290sq m (100,000sq ft). The company has shortlisted a number of parties on a potential design-and-build project.

Finnegan said if Galway continues to attract large IDA projects needing 2,400 to 4,650sq m (25,833 to 50,052sq ft) a distortion will begin to form in the local office market between existing stock and design-and-build projects in terms of rental and lease terms.

The report showed the quantity of space transacted in the 12 months up to quarter three of 2011 stood at 7,350sq m (79,115sq ft), representing a marginal increase when compared to the same period in the previous year.

Activity in the market continues to reflect significant fluctuations to take-up due to a small number of large deals skewing the figures, particularly when activity remains significantly lower than the long-run average.

The report said anecdotal evidence suggests that, similar to the previous quarter, sentiment has continued to show signs of improvement, albeit modestly. However, prospective tenants remained somewhat cautious in light of current economic conditions and were more aggressive in their quest for both competitive and flexible terms. As a result, deals were taking longer to close.