While up to 20% of Dublin’s office space is vacant, this stock is either of the wrong size or nature, or is located in the wrong parts of the capital for the US companies seeking extra space.
Internet companies such as Google and Yelp are looking for more space in Dublin, as are Salesforce.com, Bank of New York Mellon and Citigroup, say industry sources. Facebook is seeking to more than double the size of its European headquarters in Dublin, while PayPal is to hire 1,000 people to work in Dundalk, Co Louth.
While Dublin’s office vacancy rate is at 19.5%, according to estate agents Jones Lang LaSalle, a shortage of prime office space suitable for use by US firms is emerging. That may spur new development of prime offices and rising rents.
Jones Lang’s Irish MD John Moran is seeking a 165,000sq-ft headquarters building for Bank of New York Mellon in Dublin.
“To find a building in the location that we want, which is primarily south docklands, it will have to be built for us because there’s no pre-existing building of a size that actually suits our requirement,” said Moran.
US companies leased or bought about nine times more space in Dublin last year than they did in 2007, according to CBRE Group.
“Dublin is a much more cost-competitive destination than it may have been before,” said Robert O’Shea, a partner at legal firm Matheson Ormsby Prentice, who advises US companies on moving to Ireland. “That is reflected in the pipeline of projects we would see for 2012 and 2013.”
Google’s purchase of the 19,500sqm Montevetro building in April equalled 81% of all Dublin’s office space bought or leased in 2007. The absorption of existing prime space means more US firms will probably need offices built for them.
Most US companies opening in Dublin “put a toe in the water to see what it’s like, see it’s easy to get good staff and then start expanding”, said Fidelma Healy, chief operating officer at Gilt Groupe, the e-commerce firm. The company has about 70 employees in Ireland, 20 in Dublin, after it opened there last year.
MasterCard will add 130 employees in Dublin over the next four years and expand into new offices, the company said, without disclosing a new location.
Yelp, a social-networking and local-search company, is also seeking space in Dublin, Jones Lang LaSalle said.
Google has 2,200 employees in Dublin, said an IDA spokesman. More than 3,000 will eventually be employed in its European headquarters there, according to a filing by the company’s Irish unit. The company is close to leasing 32,000sq feet of space at East Point business park, according to sources.