Of­fice build­ing in Dublin ‘back to Celtic Tiger lev­els’ as co-work­ing trend spreads

Belfast Telegraph - Business Telegraph - - News - BY EL­LIE DON­NELLY

OF­FICE con­struc­tion in Dublin has re­turned to Celtic Tiger lev­els, ac­cord­ing to a re­port.

How­ever, de­spite the in­crease in of­fice build­ing, there is lit­tle ev­i­dence of over­ca­pac­ity in the mar­ket, ac­cord­ing to the lat­est Dublin Of­fice Review from prop­erty agent HWBC.

The de­mand is be­ing driven by both tech com­pa­nies and providers of co-work­ing spa­ces.

A rel­a­tively new phe­nom­e­non in Ire­land, co-work­ing spa­ces are be­com­ing in­creas­ingly pop­u­lar with the likes of We­work — which ac­counted for 15% of the mar­ket take-up this year — and Huck­le­tree snap­ping up spa­ces in the city cen­tre.

The de­mand for space from tech, tele­com and me­dia or­gan­i­sa­tions is ex­pected to con­tinue in the medium term, as is the trend for big tech com­pa­nies to ‘clus­ter’ in their pre­ferred area and ac­quire ad­ja­cent of­fice space where avail­able, the re­port finds.

“The fact that con­struc­tion lev­els are at boom-time lev­els might ring the over­sup­ply alarm bells if the con­tin­u­ing oc­cu­pier de­mand in the Dublin of­fice mar­ket wasn’t so strong,” said Tony Waters, man­ag­ing di­rec­tor of HWBC.

“Over 70% of the space due for com­ple­tion this year is al­ready pre-com­mit­ted to ten­ants. With a ro­bust de­mand pipe­line and well-tar­geted devel­op­ment lo­ca­tions, this con­struc­tion cy­cle is very dif­fer­ent from the pre­vi­ous spec­u­la­tive boom.”

While the sup­ply of of­fice space is enough to meet cur­rent de­mand, there is a ma­jor con­cern around the lack of af­ford­able ac­com­mo­da­tion for work­ers.

The re­port points to the fact that some large oc­cu­piers have looked to com­bine of­fice and staff needs in the same lo­ca­tion: for in­stance JP Mor­gan and Google have pur­chased of­fice build­ings at Cap­i­tal Dock and Boland’s Quay re­spec­tively, with sub­stan­tial apart­ment com­plexes on the same site. On the mat­ter of Brexit, the re­port finds that while Dublin has recorded wins from fi­nance and in­sur­ance firms in the UK and US, the surge in Brexit-re­lated de­mand has not been the ma­jor driver of the mar­ket.

Bet­ter in­fra­struc­ture and con­nec­tiv­ity in other Euro­pean ci­ties, and the dif­fi­cult res­i­den­tial mar­ket, are among the rea­sons why some com­pa­nies have not in­cluded Dublin in their Brexit con­tin­gency plan­ning, ac­cord­ing to HWBC.

This may change, how­ever, in the com­ing months as Brexit fast ap­proaches and the out­come re­mains un­cer­tain.

“The im­pact of com­pa­nies re­lo­cat­ing to Dublin has not been the main driver of ten­ant de­mand,” said Paul Scan­nell, HWBC di­rec­tor and head of of­fices.

“So far, over 20 com­pa­nies have de­clared for Dublin as their post-brexit base.”

Over­all, prime rents in the city cen­tre are cur­rently at around €60 to €65 per sq ft and look set to hold that level, ac­cord­ing to HWBC.

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