Kennedy Wilson has put its faith firmly in the future of the Dublin office market with an application for a campus capable of accommodating thousands of workers on St Stephen's Green.
While some continue to question the extent to which remote working might replace the office in the post-pandemic working world, the real estate investor, which has its headquarters in the US, has sought permission from Dublin City Council to build a large office-led scheme on a site bounded by the south side of St Stephen’s Green, the northern end of Harcourt Street and the Iveagh Gardens. The proposed campus would involve the demolition of KPMG’s current Harcourt Street premises and replacement with a new four- to eight-storey building as part of an overall plan to deliver 39,932sq m (429,824sq ft) of new office space. Should it be approved the development would have the capacity to accommodate upwards of 3,000 office workers on site.
The timing of Kennedy Wilson's proposal for the St Stephen's Green site is interesting, coming as it does at the same time as KPMG steps up its search for a new Dublin headquarters capable of bringing the 2,500-plus people it employs across two locations in the capital under one roof. With the leases on both its Harcourt Street and IFSC offices due to run until 2026, Kennedy Wilson may well find itself in contention to secure KPMG as tenants for the proposed St Stephen's Green campus.
While the news of Kennedy Wilson’s plan to deliver a large-scale office scheme in the face of Covid-19 will be welcomed by the property sector and wider business community, the move is entirely in keeping with the US real estate investor’s thinking on the long-term prospects for the office model.
Asked for his views on the matter in the course of an earnings call last year, Kennedy Wilson's chairman and chief executive Bill McMorrow dismissed suggestions that remote working will come to replace the traditional office.
He said: “I listened to all of that [talk of remote working] in 2000. When the tech bubble happened, what was going on in the tech world at that time, including the big accounting firms, I remember like yesterday. They were all talking about how they were going to all work remotely. And I think, the two social things that relate to office space that can’t be underestimated is the need for human contact. And the fact that it’s logistically difficult – it’s not easy to work at home when you’ve got other distractions.”
While the Kennedy Wilson chief said he expected there to be what he described as “extended discussions” in relation to remote working, he added that “over the long term, it’s not really going to amount to anything”.
Kennedy Wilson’s application for the St Stephen’s Green scheme represents just the latest in a series of developments for the Dublin office market.
Only two weeks ago, The Irish Times reported that developer Johnny Ronan's Ronan Group Real Estate (RGRE) and US investment firm Colony Capital had agreed the sale of "a majority interest" in the European headquarters offices they are developing for Facebook and Salesforce in Dublin to an international investor for a figure of more than €1 billion.
Separately, Chinese social media company TikToks engaged in a search for up to 500,000sq ft of office space in Dublin, which would give it the capacity to increase its Irish-based headcount to 5,000 workers.