Oversupply of property
Sir, – Kieran McGowan of Property Industry Ireland (Opinion, April 3rd) makes the case that: “There is a view that there is an overhang of completed buildings across all parts of the property sector. This is wrong, particularly in relation to buildings for firms entering the market in key urban centres throughout Ireland.”
The data available does not, in fact, support that view.
Savills’ Dublin Office Market in Minutes, Q4, 2011 report notes that 23 per cent of Dublin office space is vacant. In the prime locations of Dublin 2 and Dublin 4 the vacancy rate is 16.1 per cent and 23.5 per cent. Moreover, 18 per cent of vacant offices are defined as Grade A. To put this in context, the amount of empty office space in the city is equivalent to more than 200 Liberty Halls.
The Society of Charted Surveyors Ireland recently reported that the office market had little to no activity with rents/yields falling. The same was true of the industrial and retail sectors, both with large volumes of excess stock. In fact, they report that the only part of the property market that is functioning near to normal is agricultural land.
This is the industry’s own data and is reflective of patterns nationwide.
While I agree that the strategic use of construction will help Ireland recover from the present crisis – particularly in relation to public infrastructure that will serve the general population and industry – we need to be careful not to misrepresent the true nature of the dire position of the Irish property market and the levels of oversupply within it across all sectors. There is plenty of office stock to deal with most of the needs of foreign direct investment, with some /minor/ strategic investment in upgrades or new build.
And rather than overly relying on foreign direct investment to get us out of our slump we urgently need to grow Ireland’s indigenous sector – the sector we should have been investing in when we were ploughing billions of euro into property speculation. They are our ideal tenants of the future. – Yours, etc,