Demand for serviced offices in Dublin has increased despite overall demand in the offices sector softening, says CBRE Ireland.
Occupiers are increasingly seeking flexible, short-term options in a bid to accommodate growing hybrid working demands, according to the CBRE Ireland’s Flexible Office Operator Survey 2023.
Unlike other areas of the offices market, which have broadly seen softer sentiment, statistics showed the vacancy levels stood at 7% in the core city centre locations of Dublin 2 and 4 at the end of December 2023. This was also reflected in rents, which hit €600-€900 (£500-£770) per desk per month for prime space.
The survey, which polled operators including IWG, Iconic Offices, Glandore, Pembr, Sonbrook, Whitefire Offices, Huckletree, Prosperity Chambers and Grafter, found that demand was concentrated in the city centre and was dominated by technology and professional services firms. This sector accounted for around 70% of total take-up in 2023, the highest proportion of demand for flexible offices.
About 82% of take-up was for space with fewer than 25 desks, while the remaining 18% was for 25-50 desks.
Higher fit-out and financing costs were an important factor in the shift toward serviced office space.
Dublin city centre currently has 1.32m sq ft of serviced office space. This is expected to rise this year, with a total of 101,000 sq ft of space in the pipeline.
Those set to hit the market include phase two of Sonbrook’s Ella House with 9,800 sq ft, and 17,000 sq ft Donnybrook House by IWG’s Spaces.
Also, in the line-up is WeWork’s Central Plaza development, which will provide 73,000 sq ft and is expected to open in May.
WeWork has reportedly begun to exit some of its slower performing schemes in Dublin city centre, including terminating its lease at 1 George’s Quay as part of the company’s “global operational restructuring efforts”. This comes after the company leased a total of 477,000 sq ft in Dublin between 2017 and 2020.
Megan Burke, director of the CBRE Ireland flexible offices team, said: “Contrary to the broader challenges the Dublin office market is facing, Dublin flexible office operators are performing well. Dublin-based operators are seeing strong take-up and demand, and low vacancy levels.
“Given the increased flexibility being offered by employers, we expect this trend to continue. We are seeing strong interest from current operators seeking to grow their presence in the market, traditional landlords seeking to establish flexible office operations, and new operators seeking to establish operations in Dublin.”
Image from CBRE
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