IPUT planning huge supply of office space as rents spike
Investment fund IPUT is to make more than 400,000 sq ft of office space available in Dublin over the next three years, as the race to capitalise on soaring rents in the capital heats up.
IPUT last night launched its newly refurbished office block at 7 Hanover Quay, which has around 68,000 sq ft of space. That, however, is only the start of a much wider move by the firm.
Office rents for the top areas of Dublin currently stand at about €52.50 per sq ft. That is an increase of more than 50pc in just over two years. Analysts however believe that rents may go as high as €70 per sq ft in the coming year as the market for new space is so tight.
There was almost no office construction from 2009 to 2013, leaving a huge shortage. The vacancy rate in the likes of Dublin 2 and Dublin 4 is just over 2pc at present - essentially zero.
The block at Hanover Quay would be big enough for about 500 workers depending on the layout. It was formally the European headquarters of Facebook.
As well as its work at Hanover Quay, IPUT is also financing refurbishment or new development at five other properties it owns.
They include 10 Molesworth Street in Dublin 2 as well as nearby properties on St Stephen's Green and Dawson Street. It is also going ahead with refurbishing an office block in Citywest that has been occupied by accounting software firm SAP. While IPUT will have a presence at each project, the company is clear that it is not moving into development itself and remains very much an investment firm. IPUT chief executive IPUT Niall Gaffney commented: "Our focus is on acquiring and holding best in class commercial properties in prime Dublin locations in order to provide our shareholders with strong income returns.
"Over the past three years we have made a number of timely investments in the Dublin office market and in several of these properties we have taken the opportunity to add value through the redevelopment and re-letting of superior quality office space into the strengthening office market.
"As long-term investors, we have the capacity to deliver a portfolio of high quality office space to the Dublin market - 7 Hanover Quay is the first building in our programme of six office schemes which we anticipate will deliver 400,000 sq ft within the next three years," he said. His words were echoed by IDA chief executive Martin Shanahan.
He noted that "while there is a tightness of supply in some city locations at present, new development and refurbishments [such as this] are ensuring companies are finding space in the city, turning Dublin into one of Europe's most recognisable cities for technology companies and business generally".
He added: "Dublin has done exceptionally well from Foreign Direct Investment over recent years, with the numbers working at IDA-client companies in the city rising by almost a third to over 70,000 people.
"As a result, additional property solutions to accommodate this influx of investment are coming on stream all the time, with 7 Hanover Quay a prime example of this trend."