Strong jobs growth underpins office sector - Savills

The North Docks Dublin development

Property advisor Savills Ireland said the total take-up of Dublin office space in the first quarter was over 100,000 square feet.

Savills said that while this is low by historic standards, it is not surprising given the Covid-19 restrictions in place. 

It noted that a total of 15 individual transactions were completed during the quarter. 

Most of the activity took place in the city centre, although a small number of deals did occur in the suburbs.

Savills said this somewhat goes against the narrative of a possible shift away from the Central Business District (CBD) towards suburban offices, but it expect decisions on future real estate strategy and dispersal to follow re-openings of main offices as a priority.

Savills said that firms are actively looking for space and it seems that astute occupiers are examining the market because now is the time where landlords will be more flexible.

It also said that recent job announcements are also very encouraging. 

US software firm Workday recently announced 400 new jobs at its European headquarters in Smithfield in Dublin and Irish software company Enterpryze will create 100 new jobs for its headquarters in Cherrywood, Co Dublin. 

Stripe, the online payments firm, plans to create at least 1,000 new jobs here over the next five years and these will be concentrated in the firm's Dublin office.

Meanwhile, Chinese tech giant Huawei said it plans to invest €80m into Irish R&D over the next two years, leading to the creation of 110 new jobs, mostly in Dublin. 

Personio, a German HR tech company, is looking to fill 140 jobs in Dublin by the end of the year and last month Microsoft Ireland announced 200 jobs at its EMEA digital sales centre in Dublin. 

Outside Dublin, Apple in Cork and Diligent, whose European hub is in Galway, are also growing their workforces.

Andrew Cunningham, Director and Head of Offices at Savills Ireland, said that Covid-19 restrictions on commercial construction will lead to less new stock being added to Dublin's inventory than would otherwise have been the case, giving further support to rent levels given much on-site stock is pre-let.

"Reserved tallies appear to be heading back up where they stood at the end of Q1 2020, and active demand tallies appear to have bottomed out and are now turning," Mr Cunningham said. 

"Our agency team therefore expect increased levels of lease execution to follow as headway is made on vaccinations," he added.