Google has pulled out of talks to lease the Sorting Office, a seven-storey office building under construction in Dublin’s docklands.
The news will send a chill through the Irish commercial property sector which had been bracing for the impact of an anticipated shift to higher numbers of people working from home even after the Covid pandemic abates.
"After much deliberation, Google has decided not to proceed with leasing the Sorting Office," said a statement from a Google spokesperson.
The spokesperson thanked property developers Mapletree Investments, which bought the offices last year.
"We are grateful to Mapletree for all their work with us, and wish them well in the successful letting of this excellent office building. We are committed to Ireland and continue to invest in our Irish operations."
The decision not to add to Google’s Dublin office space is likely to reflect the belief among business leaders that more staff are set to work from home well into the future as a result of the experience during the Covid lockdown. Ulster Bank paused its search for a new Dublin headquarters over the summer in order to reassess what it believes are new post-Covid space requirements.
In July Google CEO Sundar Pichai told employees that the bulk of its 200,000-strong global workforce will have the option to work from home until the end of June 2021.
Any retreat from the traditional office will be a major blow to the commercial property sector, much of it backed by pension funds, which shifted radically over the past decade to focus on construction of super high-spec, large scale and centrally located offices targeted at the needs of foreign direct investment and large scale digital economy firms in particular.
Google itself helped kick-start that shift with its 2011 deal to buy the Montevetro building at Grand Canal in Dublin for €99.9m.
The Sorting Office on the site of An Post’s former Cardiff Lane sorting office is a high-end, 18,766 square metre property big enough to accommodate 2,000 staff.
It is located close to the Montevetro building as well as to Facebook’s headquarters and the Bord Gáis Theatre in Dublin’s docklands.
Marlet Property Group sold the Sorting Office to Singaporean real-estate investment trust Mapletree Investments for €240m in June 2019.
Google had been in talks to lease the offices since at least October, which are close to its existing campus on Barrow Street where the technology giant had around 8,000 staff working at the start of the pandemic in offices that feature work spaces, canteens and leisure facilities including an onsite swimming pool and gym.