By Pádraig Hoare
Less than half of more than 200 office developments planned for Dublin will be completed in the next three years, a report from property adviser Savills Ireland has said.
The firm’s Skyline Survey said there is an estimated 12m sq ft of new office accommodation planned by the end of 2021, with over 2.5m sq ft of existing buildings either being refurbished or completely redeveloped, enough to accommodate 120,000 workers.
However, authors Andrew Cunningham and Christopher Boyce said there was a measured “slippage rate” in the delivery of planned buildings.
Over half of development for projects planned for delivery in two years and beyond have been deferred, despite record recent take-up levels and demand for Dublin offices, the report said.
Mr Boyce said: “Our analysis over time shows that significant slippage in delivery of the pipeline is very common, with developers tending to overestimate how much space will be delivered in the future.
“For example, the estimated new stock for delivery in 2019 has already fallen by 17% compared to the May 2017 figures.
Furthermore, the volume of new stock in Dublin this year is 2.17m sq ft — a 55% fall on what was estimated back in 2015.”
Some 4.5 million sq ft of office development across 46 schemes is under construction and 57% of space to be delivered this year has already been signed up by tenants in advance of completion, the report said.
Demand is being driven by tech companies, serviced office operators and financial services who are all vying for the best new buildings in the most sought after areas, such as Dublin 2.
Looking further down the pipeline shows that 85 buildings with 6.5 million sq ft have received planning permission, but are not yet on site, the report said.
It “remains unclear when or indeed if these buildings will be built”, Savills said.
Mr Cunningham said: “Tighter purse strings and greater regulations in the banks and finance houses mean conventional senior debt from domestic banks for speculative development remains scarce, an undoubted cause of the slippage in delivery of new stock.
"Development is being undertaken by those who are well funded.”