Irish office vacancy rate rises 'on tech slowdown and home working'

Vacancy figures in cities have risen to as much as 18%

The Republic's construction industry will stabilise at €32bn this year, consultancy Aecom predicts.

Office vacancy rates in Irish cities have risen to as much as 18% as the slimming of jobs in the tech industry, new supply, and staff working from home combine to depress demand for  commercial property, a leading construction consultancy has said. 

The Aecom annual review also predicts tender price inflation of 4% this year, as labour costs continue to weigh despite sharp price falls in many building products, including steel, but the Gaza war has raised new challenges, it warns. 

The Republic's construction industry will stabilise at €32bn this year, it predicts.  

"The slowdown of the tech sector has unsurprisingly had a direct impact on the commercial office market in Dublin," Aecom said. 

"The combination of in-construction commercial office space coming to market and existing tenants reducing their requirements on lease renewals or through sub-letting has led to an increase of vacancy rates in Dublin and other regional cities in the range of 15% to 18%," it said. 

In housing, Aecom said there has been a strong pick-up in building output but warns that the Government under its Housing for All programme may struggle to hit its targets this year.   

"Last year the construction sector across Ireland enjoyed a greater degree of stability and predictability in contrast to the major global events of previous years," said head of Aecom Ireland John O'Regan. 

"Even though the aftershocks of inflation as well as a lack of available labour resources and high labour costs continue to be felt, there is good cause to be optimistic about this year," he said.