Developers need to start looking seriously at building office blocks in Dublin even if no tenant is lined up, if the shortage of space in the capital is to be eased in any way, a conference was told yesterday
Speaking the Commercial Property Summit in Dublin, DTZ Ireland managing director Aidan Gavin said the lack of space in the top parts of Dublin had reached the point where jobs will now be missed out on because of the space shortage.
"In the central business district in Dublin the vacancy rate is now 4pc. We acted for Facebook when they took over 4 Grand Canal Square last year. The ink on the contract was barely dry when Facebook then took space at number 5 next door.
"It was really just lucky that the block next door to where they had just moved was available. Otherwise, the 600 jobs that they will create to fill that office building could have gone elsewhere," he said.
Mr Gavin said the market had not yet adjusted to how quickly the big US technology companies in particular look to expand and then build up their staff levels.
As a result, the industry sometime struggles to adapt to what these firms want.
"If you look at the work the IDA is doing and the fact that Ireland is going to be an attractive place to live and work for years to come, it only make sense that the requirement for large office space is going to keep coming for the foreseeable future."
To combat this, Mr Gavin said developers "need to look at speculative development in Dublin now, and in due course the industry will have to look at doing it in Cork, Galway and eventually Limerick".
Mr Gavin also added his voice to critics of building regulations for urban rental accommodation, claiming that the cost of new build rental apartments was not sustainable.
"The cost of a new-build apartment is about €35,000 at present. That compares to an international average of €10,000 and that is due to the dual aspect regulations.
"As someone I was speaking to put it, the authorities want everyone's first home to be the equivalent of a Mercedes. In the motor industry your first car is very rarely a Mercedes and it should be the same in the property market.
"Dealing with the housing issue doesn't require a one-size-fits-all solution.
"As well as family homes, we also need to be able to provide 400 sq ft studio apartments. We have to be able to provide for both ends of the market," Mr Gavin said.
He was speaking at the Independent News & Media Commercial Property Summit in the O'Reilly Hall in UCD.
The event featured a range of speakers on the future of the commercial property market and where the industry is going for the years ahead.