Sandyford Business District defines success of suburban office market
South Dublin proving to be an increasingly attractive alternative for global tech giants
Google agreed to lease more than 7,000sq m (75,000sq ft) of office space at Block I, Central Park in Sandyford
Immediate M50 access and excellent transport links via the Luas green line see the Sandyford Business District (SBD) continue to perform extremely well as an alternative to Dublin city centre.
A concentration of tech companies means the telecommunications, media and technology (TMT) sector has accounted for 75 per cent of Sandyford’s office take-up over the past three years, well above the central business district (CBD) average of 51 per cent.
The finance sector has also taken large amounts of space; while, in 2019, Genesis Aviation’s letting at Block I Central Park means that the aircraft leasing sector represents 11 per cent of take-up in the year to date.
The year began positively in Sandyford with Facebook leasing 15,979sq m at Blackstone’s refurbished Nova Atria South building.
The company signed a new 15-year lease at a rent of €312 per sq m.
Rents have risen steadily due to demand and low supply of larger city centre office developments. While average 2018 rents stood at €264 per sq m, the first nine months of 2019 saw this rise to €293 per sq m.
Rents continue to increase, with prime Grade A buildings now achieving over €323 per sq m.
The Genesis Aviation deal saw a record suburban rent achieved, at €377 per sq m.
When Google announced further expansion mid-2019, seeking an additional 7,000sq m in Sandyford, the global TMT giants had multiple options to choose from.
Their shortlist included One South County, developed by Cyril McGuire, Termini (Aldgate Developments), The Hive (U+I Plc), and Block I, Central Park, developed by Green Reit. The latter, which was recently acquired by Henderson Park Capital, was the eventual Google choice.
This additional space brings Google’s office facilities in the Sandyford Business District to 16,392sq m across three properties, The Chase, Blackthorn House and now Block I.
BNP Paribas Real Estate is the letting agents on the One South County, which reached practical completion in Q2 2019.
One South County and Two South County, where construction will commence early 2020, extend to a combined 23,000sq m. Both blocks are currently under offer to a global occupier.
Once the South County office campus secures a tenant, Grade A office supply will significantly reduce with just two large office buildings remaining available, The Hive (6,782sqm), which recently reached practical completion, and Termini (20,842sqm), which is due for completion in the second quarter of 2020. However, prime development sites with permission granted for offices include the Eden Plaza site on Blackthorn Avenue (41,871sq m), the former FAAC site (36,617sq m) and the Highfield House site (27,559sq m), both on Burton Hall Road, and the ESB lands at Leopardstown (25,000sq m).
There is a growing emphasis on smart technology within buildings and demand for campus-style developments, particularly among global technology and finance operators.
This was evident from the type of occupier that looked at One South County this year, attracted by the potential to build a community and scale up quickly and easily without disrupting staff.
Keith O’Neill is head of office agency at BNP Paribas Real Estate