Dublin 8's Thinly Spread Office Stock Set For A Boost
Despite its proximity to the city centre, Dublin 8 has underperformed as an office destination to date. With several high profile schemes underway and in the pipeline — including the St James’s Gate Quarter development — that could be about to change.
According to an area focus in Knight Frank’s latest office market overview, Dublin 8 accounted for just 2.7% of total take-up in the city between 2013 and 2017.
The vacancy rate stands at 7.1% at the moment, falling to 3.6% when the 56K SF under reserve at 2 HSQ is taken out of the mix. Knight Frank said the scale of the impact of what is a modest-sized building on the vacancy rate illustrates how thinly spread the office market is in the area.
While it won't make a huge impact on the size of the office market, Oakmount will deliver a 22K SF scheme at 61 Thomas St. in Q2. The developer is also currently on-site on 55 Fumbally, a 60K SF mixed-use development of apartments, retail and office.
Developments with planning include 80K SF and 90K SF office schemes in Newmarket Square. And The Comer Group has planning for a 40K SF development on Old Kilmainham Road. Pipeline development includes 147K SF at HSQ.
But the big scheme coming down the line is the redevelopment of 12.6 acres around the Guinness Storehouse, which could potentially accommodate 680K SF of offices, as well as significant retail, hotel and leisure and 500 new homes.
Diageo is expected to select its redevelopment partner over the next five months from a shortlist of Hines, U+I and Ballymore, backed by Oxley.
Knight Frank said the site will bring critical mass and scalability to Dublin 8, enabling it to compete with more established office locations in the city. Its location in the heart of Dublin 8, meanwhile, will play a role in helping link currently disparate parts such as HSQ with Fumbally and Newmarket.
While lack of stock is holding take-up levels back, the agency said investors are clearly bullish on Dublin 8’s future prospects as seen by the range of investment funds deploying capital in the area.
Notable office investments this year have included 1 and 2 HSQ, which was bought by CK Properties for €176M in Q1; Fumbally Estate, bought by BCP Asset Management in Q3 for €33.5M; and 31-36 Golden Lane, acquired by KGAL in Q2 for €25.5M.