Tech firms dominate Dublin office space take-up

A report is warning that available supply will tighten next year

Tech firms dominate Dublin office space take-up

The Charlemont Square development in Dublin city | Image: Savills Ireland

Some 6,700 new jobs were created by technology firms in Dublin between July and September this year.

This was the city's strongest ever quarter for jobs growth in the sector.

According to a new report from Savills Ireland, tech firms were the biggest takers of office space in the third quarter.

They accounted for just over 20,000 sq m or 44% of transacted space.

While 2018 is on course to be a record-breaking year for office take-up, Savills says 2019 is expected to be a tighter year for new supply.

The report says new office completions of 210,000 sq m will be delivered this year, around 5% more space than is likely to be completed in 2019.

Dr John McCartney, director of research at Savills, says while supply will tighten next year he does not anticipate any let-up in demand.

"Ireland is carrying very strong economic momentum and, notwithstanding the known unknowns, the outlook remains positive.

76 Sir John Rogerson's Quay on Dublin's South Docks | Image: Savills Ireland

"On average, forecasting institutions predict that the economy should expand by 6.9% and 4.2% in 2018 and 2019 respectively.

"This is very strong growth by historical and international standards which should lead to further jobs growth and absorption of business space."

Active requirements in the market currently stand at 448,211 square metres, suggesting the absorption of office space will remain strong for the foreseeable future.

While it says vacancy rates are unlikely to rise from the current level of 8.8% over the next 18 months - and may even edge lower.

The office development cycle in Dublin has now been underway for nearly four years and by the end of 2018, Savills estimate 438,000 square metres of new space will have been delivered in this time.

However, when demolitions are considered, net additional space is at 188,000 square metres - or 5% of the standing stock at the end of 2014 of 3,733,000 sqm, which is less than 2% additional stock per year.