The Irish Times view on Dublin’s office market: adjusting to a new reality

Vacancy rates in Dublin’s office market are on the increases. A report this week from BNP Paribas estimated that around 14 per cent of the office space in the capital is vacant and that this will rise to 16 to 17 per cent by the end of the year. A flood of new office space is coming on to the market, but demand is much lower. This is behind the increase in vacant space and also the stalling of rent levels.

To some extent this reflects the typical commercial property cycle. But there are also some particular factors in play. One is the post-Covid trend for office workers to spend more time working from home. Companies thus require less space.

The second key factor has been the pullback from some big technology employers, who had been very major players in the market in recent years, expanding their office space significantly. Many have cut employment and are reconsidering the space they require.

What happens next will be driven in part by how these two key trends play out. But there is also another factor in the mix. Big companies are under pressure for regulatory and reputational reasons to locate in " green” office buildings. This means that much of the new space in the market may be taken up, but that the older office buildings being vacated by those moving to newer buildings may remain empty.

Rise in school absenteeism: ‘Some stay up too late on their phones until 3 or 4am’

---

Sarah Moss: As a bike-riding vegetarian feminist I can see why people might disagree with everything I think

---

How to make the most of the Leaving Cert run-in: Study tips, social media and taking breaks

---

Nicky English: Cork are finding a flow that makes them All-Ireland contenders - if they get that far

---

To a large extent the Government will let this cycle play out. But there are policy implications, too. One is that the fall-off in office building should free construction staff to work on housebuilding or infrastructure projects. Reskilling may be needed in some cases to allow this to happen.

Also, consideration needs to be given to using the vacant older office space. It is not straightforward to turn this into residential accommodation. But in some cases it should be possible– and such is the scale of the homeless and asylum crisis that even options to create the potential for shorter-term stays could usefully be explored,

Finally, the Government, a major employer itself, may have options to get good office space on favourable terms in an over-supplied market.