The office market in Dublin is witnessing an uptick in its vacancy rates. BNP Paribas’s recent report suggests that roughly 14 per cent of office properties in the capital city remain unoccupied. It further speculates that this figure might escalate to 16 or even 17 per cent by the year-end. An influx of new office spaces coupled with dwindling demand contributes to this trend, causing rental rates to stagnate.
Part of this phenomenon can be attributed to the standard commercial property cycle. However, specific elements are also influencing this situation. The current work-from-home trend post-Covid has minimised the need for office spaces. Over recent years, significant tech employers who were expanding their office spaces have started reevaluating their needs due to staff reductions.
How things progress from here will be partially dictated by these two leading trends. Another crucial element is the increasing necessity for corporations to secure their presence in environmentally friendly, or “green” office buildings, largely due to regulatory and reputational reasons. This could result in newer spaces getting occupied, while the older ones left behind stay empty.
While the Government might predominantly let the situation unfold, this may have policy implications as well. The decline in office construction could liberate construction workers for residential or infrastructure projects, though some may need to upskill for such projects.
Thought also needs to be given to the utilisation of the empty, older office spaces. Transforming these spaces into residential ones is not necessarily an easy task. Yet considering the escalating homeless and asylum crisis, the potential for short-term stays in these spaces is worth exploring.
Furthermore, as a prime employer, the Government could seize the opportunity to secure quality office spaces at favourable rates in a market experiencing an oversupply.