Dublin office market to remain under a cloud for the next three years

Revival of tech firms could see a reversal

'It is going to take longer than before for the market to digest the vacancy overhang.'

The demand for office space in the capital will remain under a cloud for the next three years, with the market "getting worse before it gets better", and the vacancy rate rising to 16.6%, according to a report by property firm BNP Paribas Real Estate Ireland. 

Supply of office developments has been boosted by delayed delivery of projects now arriving this year, while demand has been reined in because of high levels of remote or hybrid working by office workers in Dublin, according to the report. 

“Before covid, every new desk job generated around 10 sq metre of office demand," said John McCartney, research director at BNP Paribas Real Estate. 

"However this figure has plunged by two-thirds since covid. With only 3.2 sq metre now being consumed for each additional job, it is going to take longer than before for the market to digest the vacancy overhang,” Mr McCartney said, who predicted a potential overhang into early 2027.

Keith O’Neill, who is head of office agency at the property firm, said an alternative outcome was still possible should tech firms which once accounted for a huge share of demand for new Dublin offices were to pick up. "However, activity has palpably picked-up in the opening weeks of this year and a number of large corporate requirements are live in the market," Mr O'Neill said.