Despite the take-up in Dublin office space dropping from 302,902m2 in 2019 to 161,322m2 in 2020, a recent report by Savills is upbeat for the medium to long term. The report points out that only 15% of those on the Pandemic Unemployment Payment are represented by the office-based sector, so the sector has proved to be relatively resilient. There have been many prognostics in the press for the last year that the coronavirus and home working is the beginning of the end for the office based worker. Savills do recognise that there will be a shift towards Home Office, however, they predict a Hybrid Model. This may not necessarily put negative pressure on the demand for office space, as companies will still have to have enough space when the bulk of its employees are in the office at the same time. It also foresees a reduction in density.
Savills claim that many companies are in “standby mode" as they await the results of the vaccine programs. If, as expected, the majority of the population is vaccinated by September, more and more companies could initiate an active search for space, which could actually lead to a surge in the marketplace.
Another key factor is Brexit, or more so, the fact that the Brexit deal was not favourable to the financial services industry. Again, Savills are predicting that companies who cautiously took a foothold presence in Dublin in the leadup to the negotiations, will now begin ramping up their operations in Dublin. Co-working companies, like WeWork, are now seeking to increase their presence. Dublin has witnessed more and more Technology and Fintech firms arriving in Dublin recently.
Based on the above, Savills are confident that we will witness a strong finish to 2021, which will continue into the foreseeable future. Buildings with stronger environmental credentials, as well as access to public transport/cycle routes can expect to charge premium rates.
Some to the biggest deals of 2020 include Amazon leasing 6,938m2 at Burlington Plaza 2, the DAA’s 4,100 m2 leasing of Three Airport Central, HSE sublease of 4,057 m2 and Rabobank’s lease of 2,182 m2.
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