Surging Dublin Office Demand Has Developers Dreaming Of Spec Development

Dublin’s office occupier market has kept up the momentum from a turning point last year as professional services companies, state-backed organisations and expanding artificial intelligence firms fuel demand.

The market received two major boosts last week as the world’s best-known AI company seeks a big chunk of new space and a major developer announced fresh funding and development plans for the Irish capital.

However, Dublin’s office market is at a crossroads. Strong demand from 2025 may have continued into the new year, but, although inflation has cooled, construction costs still demand headline rents a full €10 per SF above the highest currently being paid for existing stock. A new paradigm will be needed to get development going again.

“It looks like there will be a return to spec development this year to meet demand,” Colliers Director and Head Of Research Kate Ryan said. “However, rents will need to be at €70 to €75 per SF-plus to justify new development, whereas rents for existing high-quality office space are in the region of €62.50 to €65 per SF.”

That might prompt sticker shock for occupiers not used to seeing rents start with a seven. But to net the best-quality new buildings, that might be what it takes. 

"The next wave of delivery will require a re-education of the market due to the economics of new construction, and, as a result, some of the terms that will be needed on new construction will surprise some given the base where rents are coming from,” CBRE Ireland Head of Advisory and Transaction Services Daniel Shannon said.

Not one but two pieces of good news hardly hit the market last week.

First, Iput Real Estate announced it had raised €175M in equity from CBRE Investment Management Indirect Strategies to continue growing a “ready-to-go” development pipeline of over €500M, adding to its 30-asset, 2M SF Dublin office portfolio.

Iput said it intends to start development of a combined 350K SF at Earlsfort Terrace and Harcourt Street. That is the first sign of spec development at scale of the sort Ryan anticipates. 

Second, it emerged that ChatGPT developer OpenAI is exploring options of up to 100K SF in Dublin as it prepares to move from a relatively small headquarters hub in the north Docks, where it launched its Dublin operations in 2023. Dublin has for the past decade been a major hub for U.S. tech firms and will hope to capture growth in AI companies as well. 

That comes on top of a strong year for leasing in 2025, with turnover of 2.7M SF the highest since 2019, Colliers data showed.

There was plenty of activity from professional services such as Deloitte, Maples, Marsh McLennan and Eversheds, but also from tech including Workday, Cognizant, and Apple and finance with AIB, National Bank of Canada and BNY Mellon, as well as from state bodies

Ryan pointed to activity and demand still concentrated in Dublin’s central business district, although there were a few large deals in the suburbs last year, including Aer Lingus at 1 Dublin Airport Central (81K SF), AIB at Central Park (77K SF) and Novartis at Termini Sandyford (40.5K SF), meaning the suburbs represented 29% of total takeup.

She also anticipates that this broad church of demand will remain in 2026, citing Mason Hayes Curran as one of the professional firms likely to complete large HQ deals, while Enterprise Ireland is seeking 100K SF-plus of space.

Part of the rising demand has been driven by stabilisation of work patterns, Ryan said, with most employees in their offices at least two to three days a week, which allows for better space planning; while multinationals will pay a premium for the best buildings in the best locations to keep staff happy.

Environmental, social and corporate governance requirements are also leading to moves instead of renewals, she said, while for secondary stock, landlords are having to be more proactive to retain and attract tenants.

The defining characteristic of 2025 and the early months of 2026 has been the “return of the G word, growth,” according to JLL Ireland Senior Director for Tenant Representation Fionnuala O'Buachalla.

“There has been a notable increase in companies that are expanding rather than contracting their footprints, showing remarkable market resilience and momentum,” she said.

For the past few years, companies have been primarily focused on stay-versus-go decisions, largely renewals and rightsizing. But 2025 was an inflection point, which marked a clear transition to relocation-led strategies as businesses sought space that better supported growth ambitions and operational requirements.

“Professional services and other sectors are making proactive decisions five years in advance of lease events," O'Buachalla said.

The reality of limited new supply has created urgency, driving earlier decision-making, she added. There have been significant requirements from new market entrants, especially in tech and AI sectors, seeking high-quality space in flagship multitenanted buildings.

"They want the prestige and flexibility that comes with premium locations and fit-outs,” she said.

There has also been an increase in new companies coming to Ireland, O'Buachalla said, which typically have a focus on flex space, allowing a quick start without significant capital investment and for a short period. However, the challenge is limited supply of high-quality modern space, with most flex operators reporting occupancy levels over 90%.

Increasing activity among AI companies is encouraging, as Dublin is potentially ideally placed to build on its reputation as Europe's tech city. 

“While professional services have been active, we're seeing demand across technology, financial services, pharma and emerging sectors like AI and fintech. The common thread is companies in growth mode needing space for future expansion,” O'Buachalla added.

CBRE's Shannon also pointed to a cycle of generational moves by the large professional services firms, with a number of large law firms still active or mobilising, while demand remains heavily focused around the core Dublin 2 CBD, with the south docklands seeing the next strongest wave of demand.

While the headline vacancy figure appears high, the on-ground experience is that supply is tightening in the most desired locations regardless of size requirement.

"You can see terms hardening as supply diminishes,” Shannon pointed out.

But Dublin is seeing a broad range of sector activity, which bodes well for the longer term. Tech is re-emerging, with positive but measured growth from a new wave of occupiers either relocating from smaller flex and agile spaces or entering the market and looking to scale.

“We could be at a similar point to 2013 and 2014, where we saw that wave of pre-IPO and midcap tech activity land and expand as they internationalised to serve the EMEA,” Shannon said.