Thursday 22 August 2019

Brexit office take-up stays low despite more moves

UK firms secure 135,000 sq ft of space since 2016 vote, writes Michael Cogley

In the first three months of the year, 1.4 million sq ft of office space was transacted in Dublin. Stock photo
In the first three months of the year, 1.4 million sq ft of office space was transacted in Dublin. Stock photo

Michael Cogley

More than 135,000 sq ft of office space in Dublin has been taken up exclusively due to Brexit, a new report has found.

Since the referendum on June 23, 2016, companies moving to or expanding in the capital have let space for their workers at relatively low volumes, according to the latest market overview by property group Knight Frank.

"While the Dublin office market has more to gain than any other European centre from Brexit, given the number of company announcements, it should be noted that Brexit-related office take-up has been quite low so far," Knight Frank stated.

"We estimate that 135,000 sq ft of take-up in Dublin can be directly attributed to Brexit, although this excludes the 10 companies that have taken space in co-working locations.

"The harder the outcome of Brexit, the more likely we are to see announcements translate into a significant number of jobs on the ground in Dublin."

Despite the low take-up from UK firms moving here, the Dublin office market has gone from strength-to-strength in the opening quarter of 2019.

In the first three months of the year, 1.4 million sq ft of office space was transacted, 85pc ahead of the take-up recorded in the same period last year. The market was dominated by technology, media and entertainment, and telecoms (TMT) companies, as well as State sectors.

The top five deals for office take-up were Salesforce's agreement for its new office in Spencer Place, the Central Bank of Ireland's move for No 4 and No 5 Dublin Landings, the Office of Public Works' deal for the Distillers Building in Dublin 7, Facebook's decision to expand in Nova Atria in Sandyford, and DocuSign's new Hanover Quay space.

In terms of office sales, the opening quarter was slower than anticipated. "Around €278.1m worth of office investment transactions changed hands in Dublin during Q1, placing it approximately in the median of quarterly investment witnessed over the last five years," the report said.

"There was a shortage of large deals during the quarter with just one over €100m transacting, although we expect this to change with a number of sales likely to take place during the year, including the Reflector building in the docklands, Bishops Square on Kevin Street, and 5 Hanover Quay."

Property group Marlet, investment firm Jones, and Hibernia Reit were behind the three biggest sales of the year so far.

Marlet sold the Charlemont Exchange to Vestas Management for €150m while Jones sold the One Building in Dublin 2 to BNP Paribas for €49.5m. Elsewhere Hibernia sold 77 Sir John Rogerson's Quay for €35.5m.

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