It’s winter time in the Dublin office market, says John McCartney, director and head of research with BNP Paribas Real Estate, “but this is just economics doing its thing. You need winter so things can regenerate.”
Tech companies are letting staff go and reassessing their office requirements, the pandemic has resulted in a surge in people working from home and interest rates are moving higher. Meanwhile, big office projects that started four or five years ago are coming to completion in a market that is already oversubscribed. Rents are softening and valuations are under pressure.
The vendors of an office block on Harcourt Street, Dublin 2, have slashed their asking price to €37 million from the guide price of €52 million they put on the building when it went on the market in April 2022. The building is fully leased to law firm Byrne Wallace.
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
— John McCartney of BNP Paribas Real Estate
Over on the East Wall Road, on the northside of Dublin’s docklands, an office block occupied by Facebook parent Meta is reportedly being prepared for sale at a guide price of €80 million, below the €101 million that the owners, Kookmin Bank, of South Korea, spent on it in 2018. (In the meantime, the bank had the benefit of five years’ rent, a reported €22.5 million). Meta, which also counts the likes of Instagram and WhatsApp among its businesses, is in the process of moving its European headquarters from Grand Canal Square, Dublin 2, to a new campus in Ballsbridge on Dublin’s southside that includes the former AIB headquarters and new buildings developed by Irish property developer Johnny Ronan. However, in