Dublin office space take-up plummets 70% amid tech sector retreat

DUBLIN, IRELAND — Dublin’s office market experienced a significant downturn in the final quarter of 2023, with the lowest take-up of office space in a decade, excluding the pandemic years. 

The Q4 2023 Dublin Office Market Report by BNP Paribas Real Estate (BNPPRE) revealed a 70% decrease from the long-term average for the period, with only 28,487 square meters (sq.m.) of office space taken up.

The technology sector, which previously dominated office take-up in Dublin, saw a marked decline. Between 2019 and 2021, tech companies accounted for over half of the office space take-up, but this figure dropped to just 21.4% in 2023. 

The total space leased to technology firms in 2023 was 26,000 sq.m., down 54% from the previous year.

John McCartney, Director and Head of Research at BNPPRE, attributed the slump to a less supportive global economy for business space demand, compounded by sectoral issues in the technology industry and the structural challenge of remote working. 

McCartney noted that the average space required per additional job has fallen by two-thirds to 3.2 sq.m. since 2019, primarily due to the trend towards hybrid working in the tech sector.

The report anticipates that the office supply in 2024 will exceed expectations due to delays in completing some large schemes. Vacancy rates in Dublin offices are projected to peak at around 16.6% in 2025. 

McCartney estimates a peak over-supply of approximately 250,000 sq.m., with the natural vacancy rate in Dublin being around 11%. He suggests that the market may not return to balance until 2027, although this could occur sooner if the labor market outperforms expectations or if working patterns change.

This downturn in the Dublin office market reflects broader trends in the technology sector and the impact of remote working, which has led to a reassessment of office space needs globally.