Office development and take-up in Dublin dominated by tech sector in 2018, according to the Deloitte Dublin Crane Survey, as it revealed that there was more than 5.6 million sq ft of development in 2018 – up from 4 million in 2017
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Office development and take-up in Dublin dominated by tech sector in 2018, according to the Deloitte Dublin Crane Survey, as it revealed that there was more than 5.6 million sq ft of development in 2018 – up from 4 million in 2017.

Developer sentiment remains strong as construction activity in the Dublin City Council area continued to increase across the residential, office and hotel sectors during 2018.

Development of student accommodation remained relatively static


The Deloitte Dublin Crane Survey, a report which measures the development volumes and its impact, also shows that the development of student accommodation has remained relatively static.

The report, published on February 6, 2019, captures the development of new schemes and the significant refurbishment of property including office, residential, hotels and student accommodation throughout 2018.

Michael Flynn, head of real estate at Deloitte Ireland said: “The strength of the Irish economy has been mirrored by yet another strong year for development activity in Dublin city.

“The development of new Grade A office space has been substantial and the completion of the current office pipeline schemes will largely address the pent up demand for space in the city centre.

‘Attract many of world’s largest and most sophisticated investors’


“Supply deficits still remain for the residential, student accommodation and hotel sectors. Our research shows the underlying gaps in supply have continued to attract many of the world’s largest and most sophisticated investors, who have entered the market to either develop, or fund development projects, in all sectors of the real estate market.

“Ireland remains an attractive investment opportunity for would be investors, with the significant presence and investment by large global companies further cementing its credentials.”

Office


The office sector has witnessed a continued surge in development, supported by the strong performance of the Irish economy and the continued commitment of investors, both domestic and international.

The volume of development in the Dublin office sector increased from c.4 million sq ft in 2017 to 5.6m sq ft of office space under construction in 2018.

“Though hugely active at present, the office sector is not without clouds on the horizon,” Flynn noted. “We envisage a reduction in the scale of city centre development over the short to medium term as the new office accommodation developed in 2018 and 2019 satisfies remaining demand.

“This has been reflected in a noticeable reduction in planning applications lodged with Dublin City Council. The decrease in new applications most likely reflects the closing of supply gaps in the market, which means future commercial development should proceed at a more measured pace. That said, the impact of Brexit on demand for office space remains to be seen.”

The survey notes that the take up of office space in 2018 has been heavily weighted towards the tech sector, with over 50 per cent of the office take up throughout the year relating to tech companies.

Flynn said: “Comfort can be taken from the fact that the world’s leading technology companies have firmly committed to Dublin in 2018, through either long-term leases or direct acquisitions.

“By nature, the tech sector is mobile and it is reassuring that Dublin is continually proving itself as the preferred destination for such large and innovative companies.”

Residential


The crane survey recorded another period of strong activity across the residential space in the Dublin City Council area. This included the commencement and completion of many large scale luxury apartment complexes, increased construction of Build-to-Rent schemes, and the entry of new and previously unseen international investment funds.

Last year saw 4,119 housing units under construction across 34 schemes. This is an increase from 3,634 housing units across 42 schemes in 2017.

Despite this increase in activity, “supply gaps will remain a constant issue for both the Government and society at large as we move into 2019”, said Flynn.

“Market dynamics have conspired in recent years to persistently drive rental rates higher, ultimately delivering sufficiently attractive returns for investors to warrant development. Such trends are unlikely to change substantially over the short term. The necessary correction of the housing shortage will not occur overnight and many challenges lie ahead.”

Hotels


According to Deloitte research, there are 20 hotels under construction in the Dublin City Council area, an increase from just nine hotels in the previous crane survey.

These range from new builds to significant renovation and extension works on existing hotels. In total, these schemes will add a total of 2,752 rooms to Dublin’s hotel stock when completed, up from 929 rooms in 2017.

“A strong Irish economy continued to improve the landscape for hoteliers across the country in 2018,” said Flynn.

“While visitors from the UK are down slightly, most likely as a result of Brexit, visitors from North America and mainland Europe are on the up, and tourism from abroad understandably plays a key role in the success of the hotel sector.

“Though the rise of alternative accommodation choices has disrupted the traditional hotel industry and provided an often cheaper alternative for tourists, hotels remain the primary source of accommodation for those visiting Dublin from abroad.

“Domestic tourism is also fuelling growth in the sector – Dublin hotels attract significant numbers of Irish visitors for weddings, weekend trips and business travel.”

Education and student housing


There are 11 student accommodation development schemes under construction, which will deliver 4,069 beds on completion. This is a slight reduction on the 4,529 beds that were under construction in 2017.

“While outside the geographic scope of our survey, UCD has also commenced construction of large on-campus student accommodation that will increase their existing stock from 3,170 to 6,000 beds on completion,” added Flynn.

“Overall, the volume of student accommodation under development in the central Dublin area is expected to reduce from current levels in the coming years with large schemes planned in locations outside of the city, such as Tallaght and Sandyford. Ireland has the youngest and fastest-growing population in Europe – demand is likely to grow as we move into the future.”

http://www.engineersjournal.ie/wp-content/uploads/2019/02/a-aaaaadu-1024x681.jpghttp://www.engineersjournal.ie/wp-content/uploads/2019/02/a-aaaaadu-300x300.jpgDavid O'RiordanNewsconstruction,Dublin,Dublin City Council
Office development and take-up in Dublin dominated by tech sector in 2018, according to the Deloitte Dublin Crane Survey, as it revealed that there was more than 5.6 million sq ft of development in 2018 – up from 4 million in 2017. Developer sentiment remains strong as construction activity in...