The report forecasts that city offices will remain key pieces of infrastructure for companies regardless of their staff’s working models.
The hybrid model of remote and in-office working will not lead to a drastic reduction in office footprint in Dublin, according to a new report from real estate firm Savills.
The report expects that there will be a post-Covid shift to a hybrid model of working where staff divide their time between the office and home or remote locations, but this won’t spell the end of the office.
After a year of remote working, the office environment has had its fair share of doomsayers but the Office Market in Minutes Report said that the hybrid model is unlikely to result in reductions in office footprints.
There may, however, be a transition period where businesses determine what their ‘popular days’ in the office are and how to safely adapt spaces for lower densities. The effectiveness of the vaccine roll-out will play a role too in how and when offices will reopen.
Smaller office sizes will be more in demand in the short-term as the economy gradually reopens and companies adjust to the post-Covid world, Andrew Cunningham, director of offices at Savills Ireland, said.
Cunningham said that while the benefits of remote working have been apparent, “the downsides have been slower to manifest”, with challenges in onboarding new employees and mentoring among staff.
“The post-Christmas lockdown has certainly been a greater challenge than the previous lockdowns and, anecdotally, many companies tell us that teams and people are strained and the mood is swinging towards optionality and choice to work from the home and the office so they can meet colleagues, collaborate and socialise,” Cunningham said.
Tech firms remain the most active office occupants in Dublin, accounting for 70pc of office take-up last year.
In 2020, Amazon announced a significant expansion of its Dublin footprint. The e-commerce giant’s letting of 6,938 sq metres at Burlington Plaza was the largest office market deal of the fourth quarter.
“Even within the tech sector, where firms have possibly the greatest ability to facilitate distributed workforces, we have not seen changes to fit-out plans and applications for consent from large tech occupiers, indicating that firms intended to stall plans for parts of their new on-site buildings,” Cunningham said.
Cunningham added that now there is a Brexit deal in place, UK companies looking for locations for European offices have a clearer view of the landscape and Dublin stands to benefit.
Given that the EU-UK trade deal does not extend to financial services, there remains a swathe of firms in that sector looking to set up new European outposts.
“Many in co-working locations, such as WeWork – having awaited the result of the Brexit negotiations – are looking to increase their Dublin presence over the coming quarters. Some big names in the new generation of tech and fintech are also now landing,” Cunningham said.
He added that any great migration from the central business district (CBD) will be unlikely.
“There is no evidence of this, with the CBD’s share of take-up standing at 63pc in Q4 2020. This demonstrates that real estate costs are not the driving metric for businesses and is evidence against the narrative that corporates will shed office space to save costs.”