Office Space Shortage in Dublin Affecting Business Growth in Ireland
Businesses in Dublin, Ireland, might have to turn to other options like temporary office space as traditional, professional-level space in buildings is getting harder to come by.
A shortage in availability has led to consistent increases in the rent rate for prime grade-A offices over the last year or so, according to The Irish Times.
Local property management, research, and real estate agency, HWBC, found that rent levels for prime offices in the Dublin market rose by 24% in 12 months prior to the end of June in their latest survey and office market review.
Further, HWBC predicts that rate will rise another 20% by the year’s end. They place the blame for the increases on a lack of new development.
“The continued rapid increase in rents is due to the fact that no new offices have been built in the past five years and, excluding pre-lets, there is less than 50,000 sq. m of new development under way in Dublin 2 and Dublin 4,” HWBC said in a statement.
The rents aren’t expected to stop rising until at least the end of 2017, when new spaces that are being planned now will be completed.
“Dublin is the perfect example of a city that can take advantage of executive suites since this type of space is very flexible both in lease term and size requirements,” says Jorge Pena, CEO, OfficeList.com. “With the current tight offerings, companies could use these temporary spaces to match their needs without a long time commitment and then when there is more space available at attractive rates, they could make the switch.”
Tony Waters, HWBC’s Investment Director, believes that the outlook for Dublin’s office market will remain positive as the economy is expected to continue growing.
There are also concerns the market will overreact to this demand and create a surplus of office space leaving the city with the exact opposite problem in a few years.
As of right now there is 5.5 million sq. ft. of office developments planned. Green REIT, another property firm, noted their concern over a possible oversupply.
However, that concern is being downplayed by other leaders in the industry, according to a piece by Irish news source Independent.ie.