Vaccine rollout to improve Dublin office market in second half of 2021

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The Dublin office market is expected to bounce back in the second half of the year when a vast amount of people in Ireland are vaccinated.

Businesses are currently taking a “wait-and see approach” before they begin to take action and return from the days of working from home.

The demand for office space will be reduced in the first six months of 2021 but the demand will increase in the back-end of the year according to the “Office Market in Minutes” report from Savills Ireland.

Even though general employment has fallen, the share of office-based employment has stayed relatively steady, which bodes well for the future according to the report.

Andrew Cunningham, Director of Offices at Savills Ireland, said that while the company has always been conservative concerning the level of occupier relocations arising from Brexit, he said it is likely transitions will increase in Dublin.

He said: “Many in coworking locations, such as WeWork, having awaited the result of the Brexit negotiations, are looking to increase their Dublin presence over the coming quarters.

“Some big names in the new generation of tech and fintech are also now landing.”

Savills are confident that a shift to a hybrid model where workers do some of their work from home, will not necessarily translate into a reduction in the demand for office space.

They said that office space will be adapted to facilitate lower density, collaborative workspaces in the office.

Mr Cunningham added: “The post-Christmas lockdown has certainly been a greater challenge than the previous lockdowns.

“Many companies tell us that teams and people are strained and the mood is swinging towards optionality and choice to work from the home and the office so they can meet colleagues, collaborate and socialise.

“The upsides of remote working were immediate, but the downsides have been slower to manifest, with impact from a lack of mentoring (including learning on the job) and constraints on virtual onboarding of new staff now becoming more apparent.”

The study also showed that IT companies accounted for the top 10 deals on the Dublin office market and 70% of overall take-up last year.

Nine of the top 10 deals in 2020 were transacted in the first quarter, when 63% of take-up was completed, showing the extent of drop-off in activity once COVID came along.

Office market in the final three quarters of 2020 when compared to the same nine-month period in the previous five year was down 74%.

The failure of the final Brexit deal for financial services were also found to benefit the office market in Dublin.

Savills said the largest deal in the fourth quarter of 2020 was Amazon’s letting of 6,938 sq. m at Burlington Plaza 2.

Daa’s 4,100 sq. m leasing of Three Airport Central was the second largest deal of the quarter.

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Source: Dublin News