SOME 136 NEW office buildings are being planned for Dublin over the next five years, according to a new report by property consultants Savills Ireland.
The buildings will total over 12 million square feet and be enough space to accommodate over 100,000 employees.
While Savills acknowledges that not all planned developments will proceed, it says that even if half advance to completion, which is likely, “Dublin will have enough office accommodation to reap any potential benefit of the UK’s decision to leave the EU.”
All images: Savills Ireland
Savills’ Skyline Survey notes that 39 new office developments are currently under construction in the capital – 13 of which have pre-commitment from a tenant to take space. A further 62 developments have received planning approval but are not yet on site, while 35 are in the planning stages.
The majority of office construction will take place in Dublin’s central business district of Dublin 1, 2 and 4. Most of this development will be new builds, with refurbishments and extensions making up over 18% of the pipeline and the replacement of existing buildings accounting for 39%.
One particular location undergoing concentrated office development is Molesworth St in the city centre, where four office developments totalling 253,000 square feet will be completed next year.
Brexit impact
Andrew Cunningham, Director of Offices at Savills, said: “Between 2010 and 2014, office construction in Dublin came to a complete halt for the first time since records began – something that was almost unique to the Dublin market and not experienced in any other western capital city.
“Take-up, however, was strong and, as a result, the vacancy rate tightened quickly causing rents to rise sharply. This has made office development viable again.”
Although the numbers look quite high, the reality is that the current pipeline is constrained by available equity and debt funding – despite the demand/supply imbalance – and we are observing large scale postponement of schemes, especially those in need of pre-lets to commence on-site. As a result, there is little chance of us reaching a point of oversupply any time soon.
In terms of Brexit, Cunningham noted: “If any UK-based companies decide to move operations to Dublin on foot of Brexit – and we believe they will – it will not happen immediately.
“A gradual migration, spread out over number of years up to the final Brexit date, is far more likely, by which time supply should be able to cope with demand.”
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