Tech firms now claiming a third of Dublin CBD offices
Technology, media and telecoms firms now occupy more than a third of all office space in central Dublin, as the boom in the sector shows no signs of abating.
According to a new report from Colliers International, some 35pc of office space in the city centre is now dedicated to tech firms.
The boom however has helped push office rents for the sector up sharply - to the point that only London and Stockholm are more expensive among European cities.
Colliers' research shows rents are now the equivalent of between €480 and €530 per square metre in Dublin's central business district. That trails only London's Shoreditch area at €770 to €840 per sq m and Stockholm, where rents for modern office space in the most central areas range between €400-and €580 per sq m.
The rate of rent increases in Dublin shows few signs of slowing either. The shortage of space in the most desirable parts of the city has prompted analysts to forecast office rents here will head past €600 per sq m by the end of this year. The increase in rents will add to worries about Ireland's competitiveness as it tries to attract foreign direct investment.
Colliers credit Dublin's tech expansion to the strength of the Irish economy, which saw GDP grow 5pc in 2014 and is predicted to increase by four per cent in 2015. Total tech office take-up reached 75,000sqm.
Colliers' director of business space in Dublin Paul Finucane commented: "A competitive recruitment environment has emerged and in order for the majority of new entrants to compete with existing operators in securing the best talent, rivalry for the best office space in the city centre as opposed to the suburbs has emerged.
"This resulted in a dramatic increase in rental levels where prime CBD rents increased by 40pc to €530 per sq m during the past 18 months, reflecting the scarcity of prime space available. Currently vacancy rates are estimated at approximately 3pc," he said.
The firm predicts the lack of supply in the CBD is likely to drive an increase in suburban take-up where prime quoting rents also increased but not at the same rate. Suburban rents now stand €270 per sq m in the more sought-after locations.
Colliers EMEA Senior Research Analyst Bruno Berretta said demand was being fuelled by "a combination of newcomers and established occupiers expanding their business operations.
"With a significant demand from the TMT sector, a consequently high proportion of the workforce has been drawn towards the Dublin market, too," he added.
Last year, Facebook leased 11,600 sqm taking its footprint to 23,000 sqm while LinkedIn purchased a site next door to its existing HQ, which is capable of housing approximately 15,800 sqm.
Twitter (which took up 9,300 sqm), Yahoo! (7,000 sqm) and Amazon (6,500 sqm) were also active.
"New entrants arrivals in Dublin include Calypso (up to 150 jobs) Guestlogix (100 jobs), and Sidetrade (90 jobs)," Mr Berretta noted.