Office space for 30,000 people coming to Dublin this year

33 new office buildings will be delivered to Dublin that could accommodate up to 30,000 office-based workers.

196,335 square metres of office space will be delivered in Dublin this year, which is up 35pc on 2020, according to property firm Savills Ireland.

33 office buildings, with the ability to accommodate up to 30,000 workers, will be added to Dublin’s office stock and, according to Savills, and 77pc of these buildings are already pre-let.

“As we enter the reopening phase of the economy, we expect to see a continued rise in demand for space, especially new environmentally friendly buildings”

Furthermore, Savills report that of the office stock that was delivered in 2020, 53pc is now either pre-let or agreed to occupiers, having fallen to approximately 35pc last year due to the uncertainty brought about by the Covid-19 pandemic, but subsequently rebounding as post-Covid occupier requirements focus on new and ESG (Environmental Social Governance) accredited stock.

2022 vision

“With negotiations ongoing on many of these 2020 buildings, we would expect this figure to rise imminently,” said Seán Ryan McCaffrey, associate director at Savills.

Looking further ahead, Savills report that over 50pc of the 197,949 sqm. of office space due for delivery in 2022 is already pre-let – a sure sign, according to Mr McCaffrey, that the office will continue to play a pivotal role for businesses in Ireland.

“As we enter the reopening phase of the economy, we expect to see a continued rise in demand for space, especially new environmentally friendly buildings, as occupiers start to return to the office and formulate long-term occupational strategies.”

According to Savills, this trend is not unique to Ireland. A separate report from the global property advisor predicts that office occupiers looking for quality workspace in Europe will face tough competition for the best space in the leasing market despite the most active period of new office construction in half a decade.

Newly developed offices set to complete in the region this year will provide 26pc more space compared with 2020. However, average vacancy rates across many cities in Europe – including Berlin, Stockholm, Amsterdam and Paris – will be below 6pc making them some of the most competitive leasing markets.

A new building supply of 5.2m square metres, which is distributed across 24 markets in Europe, is due to be completed this year, with a similar amount of supply (5.1m square metres) due in 2022. This is the highest level of new supply in five years.

But Savills predicts that with half of this space already committed – 54pc of new offices in 2021 already pre-let and 39pc in 2022 – any new prime space will be absorbed, based upon known levels of demand.

Prime offices will be most scarce in Berlin, which is set to have a 2.3pc vacancy this year, with other German cities seeing very little spare capacity. In 2021, Cologne’s vacancy rate will be 2.9pc, while Hamburg’s will be 4pc.

Savills is also seeing space constraints in Stockholm, which is registering vacancy of 5pc, and in Munich, where unleased office space will be 4pc of the market. Lisbon’s will be 7.2pc, London’s West End will be 7.3pc, while Barcelona will experience 8.5pc vacancy.

By John Kennedy (john.kennedy3@boi.com)

Published: 8 July 2021