Dublin central short of office space for FDI projects
The Economic and Social Research Institute (ESRI) in a research note published today says Dublin is short of office in particular for FDI (foreign direct investment) projects such as Google in the past.
FDI technology services operations generally locate in the Dublin 2, 4, and Docklands areas of Dublin and David Duffy of the ESRI and Hannah Dwyer of Jones Lang LaSalle (JLL) say that the take up of space by FDI companies was close to 70% of the take up of office space in the first half of 2015.
The authors say that since Google moved to Dublin in 2003, its operation has grown from a staff of five to employing more than 2,500 people. Since 2011, Google has spent approximately €280m purchasing almost 500,000 sq.ft. of office space in Dublin and it also leases a further 150,000 sq.ft of space in the city. "There are also a number of FDI companies that have established their European HQ in Dublin. HQ offices vary in size, but generally come after a period of expansion from a small initial requirement that then builds up into larger space."
They say that as it currently stands, if there was a repeat of any company wanting to set up or relocate to a facility in Dublin for more than 500 people they would now have to wait until approximately Q1 2017 to occupy a suitable building. In contrast, in 2013 there would have been seven suitable buildings to choose from.
David Duffy commented: “The role of cities in attracting FDI is increasingly important. Ireland has a number of key attributes that continue to attract FDI, but office space is also an imperative factor for any business. Our analysis shows that initial FDI requirements for office space are usually small scale but expansion into larger office space can occur in a relatively short time period. As a consequence of the crash there was no office space construction in Dublin between 2011 and 2013, which has caused a reduction in the choice of available properties.”
Hannah Dwyer, head of research at JLL added: “Although office construction has now resumed, the issue for the market is timing. We have seen a number of FDI companies move to Ireland that have expanded rapidly and grown, for example Facebook and Google. Occupiers require availability of space and flexibility in leases to enable them to expand quickly.
With city centre vacancy at just 5% and the first buildings due for completion already committed, the reality for expanding occupiers is that they will have to wait 12 months for available space. It is imperative that the future growth of companies, that Ireland has worked so hard to attract in the last number of years, is not constrained by the availability of commercial property.”
Pic above: Google acquired the Montevetro office building on Barrow Street, South Dublin, from Real Estate Opportunities plc (REO) in 2011. Treasury Holdings was the investment manager for REO and a majority shareholder in the company.
"Speak Swedish or Danish? How about Norwegian or Finnish? Sweet. We love that," says Google Dublin.