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Fallen giant: WeWork's woes knock flexible office market

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Sitting comfortably: The Lennox Building is among Dublin’s shared offices

Sitting comfortably: The Lennox Building is among Dublin’s shared offices

Sitting comfortably: The Lennox Building is among Dublin’s shared offices

The implosion of tech unicorn WeWork and its failed share offering dramatically undermined the market for flexible office space, according to a survey.

The report from Workthere.ie - Savills' serviced office brokerage service and website listing platform - shows that the amount of space leased by flexible office providers in Dublin fell 73pc year-on-year, from 410,266 sq ft (38,100 sq m) in 2018 to 109,710 sq ft in 2019.

The report said that 2018, a year in which WeWork undertook large-scale deals, was exceptional, and that last year reflected a move to more normal levels of activity which it expected to continue.

"Further to this, the take-up figures recorded for the second half of 2019 were inevitably impacted by only two of the originally seven planned WeWork deals progressing," said Michael Healy, director at Savills Ireland and head of Workthere.ie.

WeWork has come to symbolise the excesses of the most recent market boom and the company's valuation crashed to just $8bn (€7.4bn) from €47bn, as it flirted with bankruptcy.

"The take-up volumes of flexible space recorded in 2019 reflected more normalised levels, which Workthere.ie expects to continue throughout 2020," Mr Healy said.

While WeWork's Charlemont Exchange office is the largest in the capital and covers six floors, the company's near-collapse has seen it pull back and reduce the scale of investments.

This has meant that the market has reverted to something closer to past trends, with domestic providers like Iconic and Pembroke Hall setting the tone for the shared office space market.

"They lease to one occupier. It is a completely different type of model (to WeWork)," Mr Healy told the Irish Independent.

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