My colleague Andrew Cunningham wrote recently about why Dublin’s 18.6 per cent office vacancy rate is a misleading single figure to attach to a fragmented market. The buildings driving that number are not, for the most part, empty because demand has evaporated. They are empty because they no longer meet the standards the tenants actively searching for space are willing, or in many cases legally permitted, to accept.
What is playing out in Dublin has already played out in London, New York and Sydney, and our industry has a term for it: stranded assets. Savills defines these as properties that will not meet future energy efficiency standards or market expectations, and which are therefore increasingly exposed to the risk of early economic obsolescence. The lesson from those markets is that the window to act is much shorter than most Irish owners are currently pricing in.
Whether it is public-sector tenants or corporate occupiers, the pressure point is operational performance such as greenhouse gas (GHG) emissions, water usage and waste management. The Climate Action Plan sets clear GHG emission targets for the public sector. And now private occupiers are also under pressure to report their performance, with major listed corporate occupiers in Ireland reporting on a number of ESG parameters including Scope 1, 2 and material Scope 3 emissions under the European Union corporate sustainability reporting directive, with those disclosures subject to audit.
The office that a public- or private-body tenant leases can be one of the largest and most visible line items in that footprint. Similarly, small and medium-sized enterprises (SMEs) are requested to provide emissions data as part of procurement process. The revised energy performance of buildings directive, due to come into force in Ireland at the end of May, will see revised Ber rating certificates, minimum energy performance standards for office buildings and a new zero-emission building standard. Therefore, a building with a poor Ber rating, heating served by fossil fuels and no meaningful on-site renewables does not just carry the potential for higher running costs, it carries a carbon signature the occupier has to disclose, defend internally and justify to the clients scoring its tender submissions.
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The evidence from Savills’ research in other markets is clear. In the City of London, 68 per cent of all 2025 lettings were in buildings rated BREEAM excellent or outstanding, up from 64 per cent a year earlier, while prime city rents rose 6.8 per cent to £105.26 per square foot – with the top rent of the year, £145 per square foot at 8 Bishopsgate, paid for best-in-class tower space with the strongest sustainability credentials.
Professional services firms pitching for public-sector or multinational work are assessed on their sustainability credentials, which at times can be very dependent on the space they occupy. That is not a cyclical headwind – it is a structural contraction of the addressable market
In Manhattan, our first-quarter 2026 research shows the market bifurcating by quality: midtown trophy rents rose to $197 per square foot and midtown trophy availability tightened to just 3.2 per cent, while overall Manhattan class-A rents rose 4.7 per cent year on year. In Sydney, prime net effective rents grew 9.3 per cent in the year to the second quarter of 2025 as premium availability fell to 2.9 per cent of prime net lettable area, with every central business district precinct recording lower availability than a year earlier. Three very different markets, one consistent pattern: rents rising sharply for the best space while weaker stock loses ground.
Dublin is earlier in this cycle, but the trajectory is similar. The recent headline moves of large corporates – BNY Mellon, State Street, Citi, EY, Deloitte, KPMG, Stripe, Vodafone, ESBI – are not occupiers chasing cheaper rent. And companies with smaller footprints in Dublin are doing likewise, for example Bloomberg, MetLife and SEI. We have seen State bodies following a similar path, with examples being An Post, Dublin City Council, Enterprise Ireland. In several cases these tenants are paying more per square foot than previously. What they are buying is a lower operational carbon footprint, a building that supports their own net-zero commitments, and insulation from the consequences of occupying stock their clients and staff view as unsustainable.
[ Talk of a reduction in office vacancy rate in Dublin is not supported by dataOpens in new window ]
For Irish asset owners, the implications fall into three time-sensitive areas.
The first is in relation to value. ESG credentials form a key part of institutional investors underwriting requirements. This ultimately feeds through to liquidity and pricing/value. Transactional evidence is already demonstrating a material gap between grade-A buildings and older stock with poor ESG credentials – the ‘green premium’ or ‘brown discount’.
The second is lettability. The universe of tenants able to sign a lease on a B3 Ber rating or worse building is shrinking month by month. State agencies have committed to achieving their 2030 targets under the Climate Action Plan. Professional services firms pitching for public-sector or multinational work are assessed on their sustainability credentials, which at times can be very dependent on the space they occupy. That is not a cyclical headwind – it is a structural contraction of the addressable market.
The third is capital expenditure timing. The cost of deep retrofit – facade, plant, controls, embodied carbon strategy – has risen sharply since 2022 and shows no sign of falling. The buildings that have repositioned successfully in London, Paris and Amsterdam are those where the decision to invest was taken early and delivered before the asset fell out of the lettable tier. Once a building has been passed over by three or four prospective tenants for ESG reasons, the market knows and recovery becomes significantly more difficult.
None of this is a counsel of despair. Irish asset owners have real advantages: Dublin office stock is young by international standards, the grid is decarbonising and the retrofit supply chain is maturing. We have recently appointed James Wood to lead our project management team, bringing significant experience in the planning and delivery of large‑scale energy‑upgrade works across existing buildings. What the situation requires is clear-eyed triage. For every asset in a portfolio, owners should now be able to answer three questions. What is the operational carbon intensity today, measured not modelled? What is the credible pathway to achieve zero-emission building standard, costed and financed? And if there is no such pathway, what is the exit or change-of-use strategy, and on what timetable?
Stranded assets are not a future risk for Irish commercial real estate. They are the quiet reason a meaningful share of this month’s headline vacancy figure cannot be let at any rent. The owners who act on that understanding in 2026 will be the ones whose assets are still in the lettable universe in 2030. Those who wait may find the market has already moved on.
Orla Coyle is a director and head of ESG at Savills Ireland
