PROPERTY: DUBLIN’S DRAW
Long reputed as a small city with big city charm, will Dublin’s low corporation tax, connections with Europe, youthful population and abundant personality see it become a new creative and tech hub alternative to London?
Long reputed as a small city with big city charm, Dublin’s low corporation tax, connections with Europe, youthful population and abundant personality might see it become a creative and tech hub alternative to London
Dublin is known for being a small but cosmopolitan metropolis, bursting with history dating back to the ninth century. Famous for its lively pubs serving pints of Guinness, a look beyond the clichés reveals a city rich in culture, packed full of museums, galleries, medieval castles and breathtaking cathedrals; all made the more charming by an outgoing and friendly local population.
The Irish capital is neatly divided by the River Liffey and beautifully set near the seaside – perhaps a source of inspiration for Samuel Beckett, William Yeats and Oscar Wilde, to name a few literary greats who have called Dublin home.
While the southern parts of the city have traditionally entertained the more exclusive end of the property market, exemplified by attractive Georgian townhouses, the northern reaches of Dublin, traditionally viewed as more working class, are now coming up roses for both buyers and investors alike.
THE THREE T’S
However, it was just a decade ago when Dublin was making the headlines for all the wrong reasons. The epochal financial crisis of 2008 sent property prices plummeting, leaving the market to collapse and many property owners left in negative equity.
Since that time a recovery of sorts has started, with Dublin named as the fastest growing economy in Europe for a third year in a row in 2016, according to estate agent Knight Frank. The agent states that Dublin’s success can be attributed to the “three T’s” – technology, talent and tax.
The tech industry is driving Dublin’s commercial growth and boosting the city’s stronghold as an international hub for other sectors including financial services, aircraft leasing and media, says John Ring, an investment analyst at Knight Frank Dublin.
Many international tech companies including Google, Facebook, Linkedin and Twitter have relocated their European headquarters to Dublin – resulting in the area around Grand Canal Dock to become known as Silicon Docks.
“With 40 per cent of the population under 29 years old, Dublin also offers access to a young, vibrant and welleducated pool of talent,” says Ring.
“Dublin has a youthful vibe and there’s money now too,” explains Althaea Federlein, chief commercial officer of Iconic Offices in Dublin, a
company that provides bespoke offices for co-working, and encourages community building for entrepreneurs around the city. Some of her biggest clients include those working in tech, but also many Americans who favour Dublin’s access to Europe with no language barriers.
An indicator of Dublin’s boom, Iconic Offices has grown from three employees to 40 in the past twoand-a-half years. The company is adding 160,000 sq ft of office space this year, Federlein says.
“Now it’s 25 to 35-year-olds who have a lot of disposable income, and Dublin is reacting to that,” says Federlein. “There are a lot more art shows, gallery openings, a cool little alternative scene. There are so many great things about living here.”
Another incentive for companies to move to Dublin is the low corporation tax of 12.5 per cent, one of the lowest by international standards.
This has boosted demand for commercial rental space. According to Knight Frank, the city has seen prime rents rise from a trough of US$36.25 per sq ft in 2011 to US$61 per sq ft at time of writing.
The demand for new office spaces is high, notes John Mccartney, director of research for Savills Dublin. “For the first time, [Dublin] is demolishing old to make way for new,” he says, referring to Ireland’s rapid growth in employment of 3.5 per cent per annum in 2016 – a number that is even higher in Dublin.
According to Mccartney, the city centre boom can be attributed to the natural population growth combined with an influx of immigration from abroad. Parking lots are being turned into commercial spaces as people increasingly take public transportation into the city, a result of to the development of Dublin’s infrastructure to accommodate the current growth and demand.
This translates well for the residential market in Dublin too.
MANY INTERNATIONAL TECH COMPANIES INCLUDING GOOGLE, FACEBOOK, LINKEDIN AND TWITTER HAVE RELOCATED THEIR EUROPEAN HEADQUARTERS TO DUBLIN – RESULTING IN THE AREA AROUND GRAND CANAL DOCK TO BECOME KNOWN AS SILICON DOCKS
“One third of all residential transactions in the last three years have been from investors. Money has flown into the sector,” says Mccartney. “The returns are pretty clear, and the risks are low as there has been an undersupply [of property] for the next two to three years,” he adds.
“From an investor’s point of view, the risks are not really there,” Mccartney continues. Of Dublin’s four different council districts, the residential yield on a banking deposit is 4 to 5 per cent, he adds.
The Docklands, or the Silicon Docks, is definitely buzzing. It’s home to young, well-off professionals working in tech companies including Google, Facebook, Twitter and others.
“An improved infrastructure with good transport links and amenities as well as waterfront options has seen an increase in demand from first time buyers, expats and investors buying in Dublin’s Docklands,” notes Rena O’kelly, director of residential sales for Knight Frank.
This group prefers being at the centre of the city instead of moving out to the suburbs. “They are embracing this urban style as a way of life,” says O’kelly.
Two recent sales – No. 26 Gallery Quay (three-bedroom/1,224 sq ft), which sold for €1.3m (HK$11.31M) and 51 Grand Canal Wharf (twobedroom/732 sq ft), which sold
for €450,000, also show that the demand is at both ends of the scale.
The pretty and stately red brick areas of South Dublin City and its high-end residential areas of Ballsbridge, Rathgar and Dartry continue to see strong demand in the wealthy postcodes of Dublin 4 and D6, says O’kelly.
D2, D4 and D6 (Ranelagh) are always popular, Federlein agrees.
These areas have traditionally always been attractive to well-off Dubliners. Now, as many Irish who were living abroad – particularly in London – move back, D2, D4 and D6 are frequently the areas they aim to live in. The attractiveness and popularity of these areas has pushed prices up in bidding wars, O’kelly says.
South Dublin, home to many of the city’s rich and famous – from U2’s Bono to racing drivers Eddie Irvine and Damon Hill – remains popular, as it comprises the Dalkey and Killiney areas, with their striking headlands climbing dramatically from the sea.
Often referred to as the Irish Riviera, South County Dublin offers some of the swankiest and largest residential properties with a more secluded way of living.
Knight Frank is currently marketing the sale of Gorse Hill on Vico Road. Sitting on two acres, the 10,200-sq-ft residence enjoys stunning views from Sorrento Terrace and Killiney Beach and Bay and is priced at €8.5m at time of writing.
But all over the city, there’s an energy and buzz.
“It’s great living here. Rents are a bit punchy, but the quality of life here is very good,” Iconic Offices’ Federlein notes. “We’re close to the sea, it’s easy to get around, it’s a
ACCORDING TO KNIGHT FRANK, THE CITY HAS SEEN PRIME RENTS RISE FROM A TROUGH OF US$36.25 PER SQUARE FOOT IN 2011 TO US$61 PER SQUARE FOOT IN 2017
friendly city and it’s a fun city.”
Dublin has undergone drastic changes in the last 10 to 15 years, she says, something evidenced by the influx of top-notch restaurants and cafes popping up all around town.
“The coffee culture is insane,” she says. “It’s not just Starbucks. Dublin has these little bespoke coffee shops that roast their own beans … it’s a great little city. People are open to doing business and understand different cultures. Greater Dublin has just under two million people, but it punches well above its weight.”
WHO IS INVESTING?
Private equity investors – mainly from the United States – were among the first to sweep into Dublin.
“With the market now considerably de-risked, pension funds, primarily from Europe and Canada, and sovereign wealth funds from Asia, are accounting for the next wave of capital in the expectation that Dublin will continue to deliver superior riskadjusted returns over the coming years,” says Knight Frank’s Ring.
Property prices in Dublin increased by 3.7 per cent in 2016,
SOUTH DUBLIN, HOME TO MANY OF THE CITY’S RICH AND FAMOUS – FROM U2’S BONO TO RACING DRIVERS EDDIE IRVINE AND DAMON HILL – REMAINS POPULAR
compared to 1.4 per cent in 2015, according to local estate agency Sherry Fitzgerald.
“Continued growth in domestic demand, combined with an ever improving labour market, sees the Irish economy poised for another strong performance in 2017,” Fitzgerald states.
The new homes market is booming in Dublin too, according to the firm.
Dublin saw significant growth during the year, making up 38 per cent of total new dwelling sales in Ireland so far. Fitzgerald notes that first-time buyers make up the lion’s share of these sales, spurred on by the government’s incentive to help this group by easing borrowing restrictions.
Undoubtedly there is a lot of uncertainty in Dublin due to the UK’S impending departure from the EU, says Mccartney.
As the UK leaves the single market, “adversely affecting trade relations, migration and the political landscape between Ireland and the UK, the true longterm implications of Brexit on the Irish economy are not yet fully visible,” warns Fitzgerald.
Many companies have already announced they will be moving employees from London to Dublin – JP Morgan, for one – and others are likely to follow, says Mccartney.
A recent study by the Central Bank and the Society of Chartered Surveyors Ireland found estate agents have forecast Dublin house prices to rise by 8 per cent in 2017. With new developments being a focus for the government to meet the lack of supply, Dublin looks set to keep its growth going.
Despite whatever uncertainty there may be in the market as Brexit gets underway, Dublin looks set to enjoy a continuing boom.
OPPOSITE South Point combines luxurious furnishing with a wacky design aesthetic.
ABOVE The Brickhouse is equipped with flexible coworking spaces for one to 350 members.
THIS SPREAD The interior of The Wilde reads more like a private luxury residence than co-working space.
OPPOSITE Gorse Hill sits on two acres and enjoys stunning views from Sorrento Terrace and Killiney Beach and Bay.
ABOVE Rock Lodge House is located in South Dublin, home to many of the city's rich and famous.
LEFT A five-bedroom house on Raglan Road in Dublin 4.