The expectation is that an already oversupplied office market is going to have even more excess capacity by the end of this year. We shouldn’t overreact though, says McCartney. Like the seasons, the commercial property market has its cycle. “With commercial property projects, the tendency is for surges of new supply to come on stream at the same time,” he says.
The “balancing point” for Dublin is a vacancy rate of 11 per cent, says McCartney. At 11 per cent, rents tend to be steady. Above that level, they come under pressure. “So at the moment we are looking at a degree of mild oversupply and what is going to happen over the remainder of this year is that oversupply is going to increase.” The market is not going to be able to consume the new office space that is due to come on stream, and the end result will be rents coming under pressure.
McCartney, again, has a number. This time it’s 10 – the rule-of-thumb number of square metres of office space that is needed for each new job in the services sector. The number is based on the classic open-plan office where each employee has his or her own desk. Now, with hybrid working, that number is going to change.
Working from home means people have become used to the privacy they have when, for instance, taking part in a video conference from their kitchen. They may find taking part in an online meeting when at a desk in an open-plan office unsatisfactory. Photograph: iStock Another issue, says MacCabe, is the vibrancy or otherwise of the district in which an office is based. Offices have come to dominate some areas of the city, giving them an empty feel, especially after hours. People are more likely to come to the office to work if the office is based in a vibrant district.
Looks like lots of property will be bought up cheaply and converted into accommodation! Follow the money