Wednesday 26 October 2016

Firms face year wait for office space in capital

Hannah Dwyer
Hannah Dwyer

Multinationals looking to expand their operations here are being told they'll have to wait for a year because of a shortage of Dublin office space.

Around 70pc of the take-up of office space in the first half of the year was dominated by international technology firms, according to joint research from the Economic and Social Research Institute (ESRI) and commercial property giants Jones Lang Lasalle.

And they're warning that available office space in Dublin city centre is limited.

"We have seen a number of FDI companies move to Ireland that have expanded rapidly and grown, for example Facebook and Google," said Hannah Dwyer, head of research at JLL and joint author of the report.

"Occupiers require availability of space and flexibility in leases to enable them to expand quickly.

"With city centre vacancy at just 5pc and the first buildings due for completion already committed, the reality for expanding occupiers is that they will have to wait 12 months for available space.

"It is imperative that the future growth of companies, that Ireland has worked so hard to attract in the last number of years, is not constrained by the availability of commercial property."

The research note examines the take-up of space in the Dublin office market by foreign direct investment (FDI) companies. It shows how this has evolved and whether there is enough pipeline stock to meet their growth requirements.

David Duffy, ESRI research officer and co-author, said office space is an important factor for many businesses.

"Our analysis shows that initial FDI requirements for office space are usually small scale but expansion into larger office space can occur in a relatively short time period," Mr Duffy said.

"As a consequence of the crash, there was no office space construction in Dublin between 2011 and 2013, which has caused a reduction in the choice of available properties."

A shortage of office space is also pushing up rents.

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