Did you know that, between them, Google and Facebook occupy almost 4pc of Dublin’s available office space?
Dublin is officially a tech city, with born-on-the-internet firms now dominating the available commercial office market in the Irish capital, according to a new report from property firm Lisney.
Facebook and Google alone are on track to occupy 4pc of all commercial office space in Dublin’s city centre in 2018, with their total space amounting to 38,500 and 74,600 sq m, respectively.
‘There is evidence of blue-chip international companies winning out over indigenous Irish companies’
– JAMES NUGENT
The news may be good for multinationals but, for start-ups and indigenous companies, the market is saturated.
“With almost all new office space fully let by the time it is completed, competition remains intense,” said James Nugent, chair and head of offices at Lisney.
“There is evidence of blue-chip international companies winning out over indigenous Irish companies. In reality, indigenous businesses are struggling to match the rent-paying ability of overseas occupiers.”
Urgent need to build more offices
Not only is the market for office space saturated, the Lisney analysis shows that the completion of new office buildings will increase marginally this year.
An anticipated total of 189,000 sq m of new office stock will come on stream in 2018, with 37,000 sq m of this located outside the city centre. However, of the city centre space due to be completed during 2018, 68pc is already pre-let or reserved.
Looking ahead to 2019, the report highlights the urgent need for construction of commercial office space to ‘ramp up’ significantly in order to keep pace with predicted demand. However, only 26,800 sq m is due to be completed in Dublin city centre in 2019. To put this in context, this amounts to less than the space Facebook currently occupies in the market.
With demand for office space at an all-time high, vacancy rates – which are a key benchmark of the health of the commercial property sector – are now running at a headline rate of 8.7pc in Dublin (6.9pc in city centre).
Vacancy rates this low have not been seen since 2000.
Conclusions in the Lisney report indicate that the ferocious appetite from overseas occupiers coupled with the low level of completions is putting indigenous Irish businesses that are looking to rent space in the city under pressure.