A NEW REPORT on the ageing profile of the Dublin office market has suggested that the Government should consider introducing tax reliefs to encourage owners to refurbish rundown buildings.

CBRE says that the Business Premises Renovation Allowance has stimulated refurbishment projects in the UK and Northern Ireland, and a similar scheme here could create thousands of jobs at a time when this was clearly necessary. "There are thousands of construction workers in need of work in the Irish economy at present who would benefit from a move to retrofitting accommodation."

The net result would be an improvement in the availability of the type and quality of office stock required to continue attracting multinational occupiers and employers to this country.

CBRE also suggested that the Government could become champions of refurbishment by bringing its own office properties up to the latest standards of energy efficiency and modern specification, which would improve their letting potential and sale prospects.

The report says that depreciation and obsolescence have become more relevant for the owners of Dublin office buildings. No new developments had been completed over the past two years and the scarcity of funding and the general economic climate had meant that landlords were not focusing on the upkeep and maintenance of their office properties. In addition, many of the buildings were in the hands of receivers, financial institutions and Nama, and their upkeep had not been a priority. It had also become difficult for landlords to hold on to existing tenants in office buildings that had started to deteriorate.

Willy Dowling, head of office agency with CBRE, says many Dublin office buildings were now in "desperate need of refurbishment" while others would have to be redeveloped. However, refurbishment was likely to be a more practical and cost-effective solution than redevelopment in the present economic climate.

With almost two-thirds of Dublin's office stock dating from more than 10 years ago, it is hardly surprising that some of it is "functionally obsolescent to some degree," says CBRE. The report suggested there would be a "notable increase" in refurbishment projects in the central business district over the next 12 to 24 months.

Marie Hunt, head of research at CBRE in Ireland, said that if undertaken properly refurbishment - both minor or major - could provide improved returns for property owners over the longer term. However, in some cases considerable outlay on refurbishment may have little or no material impact on the rent or capital value but would ensure that it would not be vacant.