Prime Dublin office rents have increased 130% since 2012. A recent report from Real Estate advisory firm HWBC, stated that prime Dublin office rents will soon peak at €700 per square metre, as opposed to €300 per square metre in 2012. That is over a 130% increase.
After building virtually nothing for years after the crash, developers are now working overtime on new offices. CBRE estimates that there is 380,000 square metres of new office space being currently built in Dublin.
US Direct Investment
Direct investment from US firms is the main positive contributor to the Dublin office market, employing one in five people in Ireland.
Wall Street economist Joseph Quinlan revealed that in 2013, the first year of the fragile economic recovery, US foreign direct investment into Ireland rose by 42%, while during the same year US investment to Europe fell by 19%.
The largest contributor to the recovery of the Dublin office market, has been the tech sector, which accounted for 40% of the new office space taken up in the first half of 2017, compared to 21% from financial services firms, 14% from the public sector and 11% from business services.
Some of the largest occupations this year have been
Linkedin with 17,650 square metre
J.P. Morgan 11,900 sq mt
Amazon 16,000 sq mt
Zendesk 5,400 sq mt
Shire Pharmaceuticals 7,000 sq mt
Amazon with 16,000 sq mt
The new Dublin Linkedin office, is the first building, the firm has built outside the USA. The space is equipped with a state of the art gym, music studio and games room. There are plans for many other US multinationals to expand in the near future.
Dublin along with Frankfurt have emerged as top destinations for financial services looking to shift operations out of the UK after Brexit. Barclays has been the first to expand in Dublin and over the summer, signed a 20 year lease, for 3,437 sq m of space in Molesworth Street.
EY Financial Services Brexit Tracker, is showing that 59 of the 222 companies monitored are either reviewing their primary locations or have started moving parts of their business out of the UK. EY said 19 of those companies said they are moving operations and/or staff to Dublin, putting it ahead of Frankfurt (18), which came in second place. Meanwhile 22 investment banks have declared their intention to move staff or operations to either Dublin or Frankfurt.
In the next 12-18 months, with the conclusion of negotiations between the UK and EU, Dublin is well positioned to take advantage of the spoils of Brexit.
A Flexible Office Market
Not all companies in Dublin have a traditional office space. In the last number of years, there has been a huge increase in demand for serviced office space, virtual office space, co-working space.
The companies offering these various office space concepts, allow clients, to have a co-working office space with other individuals and businesses, virtual addresses and phone answering services, service office space with no annual or monthly leases. All of this alternative office space is taking out a massive cost factor for both established and startup businesses alike.
The work place environment is changing along with the usual 9-5 office space!