Spare office space is rising in Dublin as some of the world’s biggest technology firms grapple with post-pandemic working practices and global industry uncertainty.
So-called ‘grey space’ – surplus office accommodation that is leased but not being used – currently accounts for about 32 per cent of all available supply and is set to increase further, according to estate agent Lisney. The overall vacancy rate in Dublin now stands at around 13 per cent.
The trend comes amid a wave of job cuts from large tech companies such as Twitter and Salesforce, which have a big presence in the capital. Meta last month decided not to occupy part of its recently completed European headquarters in the city.
Big tech accounted for between one-third and half of activity in the office property market in recent years, with hiring ambitions to match, Lisney said in a report.
“Many of the large tech companies had very ambitious staffing targets over the last three to four years and may never have been able to fill all the office space they hold, the firm said. A shift to hybrid working has also driven a reduced need for office desk space, according to the report.
Even so, overall take up volumes in the Dublin office market have improved since the pandemic, with activity increasing about 35 per cent from 2021, according to CBRE Ireland. Professional, financial, pharmaceutical, and public sector tenants were the most active in the fourth quarter rather than tech, it said.
Meanwhile, spare fully fitted office space may be attractive to smaller local players, looking for flexible arrangements without high renovation costs, Lisney said.
“We now expect to see some of the smaller scale companies, many of whom are indigenous, take advantage of recent trends; hiring staff and taking additional office space. – Bloomberg