The current year has been another good one for the Dublin office property market as rents scaled new heights and vacancy rates hit record lows.

For landlords, investors and developers - indeed anyone in the property business - it has been the best of times. But for those seeking office space it has been tough and most observers believe there is little respite ahead, particularly for those looking for space in the city centre.

"I remember agonising the first time I had to pay £20 a sq ft for office space," says one regular space-seeker. "Now, one estate agent is predicting £40 by the end of next year."

Although most observers believe that such a high figure will be achievable only in certain sought-after pockets of the city, demand in general is likely to continue to outstrip supply next year. While employment growth is expected to slow, it is likely to remain strong by historic standards. The Economic and Social Research Institute (ESRI) is forecasting growth of 3.5 per cent next year, following 4.8 per cent this year.

The services sector, particularly finance and the hi-tech sector, were responsible for the biggest take-up of space this year, a trend that is expected to continue. But those hoping to find space close to town for their workers will face a tough task.

"There is very little coming on stream in Dublin 2 and any space coming up will be seriously and heavily chased. Dublin 4 is also set to remain tight," says Declan O'Reilly, director with the DTZ Sherry Fitzgerald estate agency. "Going into the the next 12 months, anyone who wants to stay in the centre of town will have to pay a hefty premium."

Already, the £30 rent level has been breached in parts of the city centre with average rents hovering between £27 and £30 per sq ft. In one case, Rothschild Bank has paid £33 per sq ft for a single floor in Hardwicke's new development at Adelaide Road.

Eastpoint Business Park, in the Dublin docklands, remains the best hope for those who want to stay reasonably close to town until further developments outside the IFSC in the Docklands start to come through.

However, many believe that large scale development in the area is unlikely to proceed until the national conference centre goes ahead while many players are also awaiting clarification on the density issue.

A FACTOR is the need to secure planning permission, and the time needed to build, and estate agents say it will be 18 to 24 months, or 2001 at the very earliest, before developments can be delivered and the city-centre logjam is broken. In the meantime, anyone needing city-centre office space faces difficulties.

As a result, more and more of those looking for space will be pushed out to the suburbs where significant amounts of space are coming on stream in areas such as Sandyford, City West, Park West and Blanchardstown.

However, this is not an option for everybody. For instance, the Office of Public Works (OPW), which manages office space for the Government, says that it can move certain functions out of town. A spokesman cites the Office of the Revenue Commissioners which has relocated some of its staff to Tallaght. But the OPW will always need city-centre space close to Government and many companies, for various other reasons, will also insist on central accommodation.

For those happy to locate in Dublin's periphery, the outlook is better as supply should ensure the suburban market remains competitive.

Estimates vary but the potential amount of office space that could be developed around the M50 ring road is believed to range from 17 million to 25 million sq ft. But estate agents reckon that only around one million sq ft is likely to come on stream in 2000, most of it towards the end of the year.

Out-of-town rents currently range from £15 to £18 per sq ft on average, estate agents say, and are likely to remain in that range as the space coming on stream is absorbed by those who can't find the quantity or quality of space they need in the city centre.

THE new Central Park development in Sandyford, for instance, is expected to command rents of between £17 and £18 per sq ft - towards the upper end of the range - when it starts to become available towards the end of next year.

The better availability of space in the suburbs is also likely to lead tenants to be more discerning, with increased emphasis placed on issues such as accessibility and facilities.

Large-scale, out-of-town office developments will have to include the necessary supporting infrastructure such as transport, shops and restaurants. Developers seeking an edge are likely to be keen to build near the DART or the proposed LUAS line while facilities such as creches will become more common.

According to Nicholas Corson, director of Finnegan Menton, which is acting as joint agent for the Central Park scheme, it will include a 150-bed hotel, convenience stores, restaurants and a creche while a shuttle bus service will be provided to the DART station in Blackrock and to the Stillorgan Quality Bus Corridor.

The recent trend towards pre-letting is also likely to continue, encouraged by the banks which tend to prefer to loan to those developers who already have prospective tenants lined up rather than funding speculative developments.