New sites in capital to house 30,000 office staff
Enough office space is being constructed in Dublin to accommodate as many as 30,000 workers, new research has found.
However, much of the space is replacing older offices which are being knocked down and rebuilt, or refurbished, say property agent Savills.
That means that the real impact of the new offices being built at present is much lower than might be expected.
The report found that there are 35 new office buildings on-site at present. Those buildings comprise almost 3.5 million square feet of space.
The vast majority of those blocks are located in central Dublin, mainly in Dublin 1, 2 and 4. About one third of that space is already pre-committed to an occupier.
Some development is taking place within the boundaries of a Strategic Development Zone in Dublin's north and south docks, however, with a number of planning applications in place, activity in the area is expected to increase significantly this year, say Savills.
The new offices are having little impact on the shortage of space in the city centre, as there is always a big delay between a developer breaking ground on a site and the office block actually opening. The vacancy rate in the likes of Dublin 2 and the south docks is effectively zero, with no major blocks available to be occupied by a big company. The shortage of space in the capital has long driven fears that the country could lose valuable foreign direct investment.
Savills head of offices Andrew Cunningham said it would take time to free up space in the city.
"In an ideal world, the delivery of office space would be instantaneous. However, in reality, it takes time. The average lag time between planning, construction and completion is two to three years.
"In the interim, it stands to reason, as evidenced by the current rate of growth, that rents will continue to rise. Today, prime central business district office space is being let for €55 per square foot and we expect this to rise to €65 by the end of 2016. Where rents will go after that is completely dependent on the delivery of new stock and, of course, economic conditions," he said.
"Redevelopments mean taking office space out of the supply chain, so despite this new wave of construction, we are likely to end up with less space rather than more in the immediate short term due to demolition of old 1970/80s buildings."