Tuesday 21 November 2017

Development Securities boss is latest to fear office glut

Development Securities is building the biggest speculative development in Dublin on Burlington Road
Development Securities is building the biggest speculative development in Dublin on Burlington Road
Peter Flanagan

Peter Flanagan

There is "definitely a risk" that a huge oversupply of new office space will hit the Dublin market in 2017 and 2018, the head of one of the top UK property investment firms has warned.

Speaking to the Irish Independent, Development Securities chief executive Matthew Weiner said he was concerned that the number of office blocks in the planning process at present may drive down rents sharply if they all come to fruition.

While there has long been a shortage of office space in Dublin, he said there was now "potential for supply side response".

"The key question is how those [new offices] will be funded.

"Most of the cranes on the Dublin skyline at present are equity funded. Equity funding is expensive and difficult to get. Now, if we start to see projects that are debt funded, then I would start to worry.

"I wouldn't want to be finishing an office block in the fourth quarter of 2017 - we are already looking more at refurbishment rather than new builds," he said.

Mr Weiner's comments chime with similar words from Green Reit last month which highlighted that the equivalent of about 20pc of the entire Dublin office market was now in the planning process. Concerns about a potential glut of new builds have been dismissed however by Hibernia Reit and others including Davy Stockbrokers.

Mr Weiner was speaking after Development Securities announced strong interim results and a rebrand to "U+I Group".

The firm is building the biggest speculative development in Dublin on Burlington Road. Mr Weiner said that was on course to be finished in the first three months of 2017.

It is also preparing to market apartments it has built at Percy Place in Dublin 4 and is looking at options for offices at Donnybrook House and elsewhere.

Mr Weiner said the company continues to be on the lookout for Irish investments.

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