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 Post subject: Commercial property crash?
PostPosted: Wed Feb 08, 2017 10:49 am 
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So many new offices going up and but there already is plenty of stock- what if all the brexit jobs dont materialise?

http://www.independent.ie/business/comm ... 32506.html


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 Post subject: Re: Commercial property crash?
PostPosted: Wed Feb 08, 2017 10:58 am 
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OrphanAndy wrote:
So many new offices going up and but there already is plenty of stock- what if all the brexit jobs dont materialise?

http://www.independent.ie/business/comm ... 32506.html


Quote:
The Dublin district with the highest vacancy rate was D17 (19.2pc), while D16 (7pc) had the lowest vacancy rate.

D17 is one of the most deprived areas of Dublin. I don't think that those vacancy statistics are evidence of a bubble.

D2 rents are going through the roof.

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 Post subject: Re: Commercial property crash?
PostPosted: Wed Feb 08, 2017 1:14 pm 
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OrphanAndy wrote:
So many new offices going up and but there already is plenty of stock- what if all the brexit jobs dont materialise?

http://www.independent.ie/business/comm ... 32506.html

Commercial space also includes shops and industrial premeises.


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 Post subject: Re: Commercial property crash?
PostPosted: Wed Feb 08, 2017 1:17 pm 
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It would appear that supply will be very healthy this year but that this is the peak year for supply with much less in the pipeline for 2018 onwards. It also appears that demand is very healthy in Dublin anyway. I wouldn't be building offices on spec anywhere else though other than in Galway City centre if I could go high enough.

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 Post subject: Re: Commercial property crash?
PostPosted: Wed Feb 08, 2017 4:22 pm 
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It's looking as if there will be around 3m square feet of new office space in Dublin this year.

From what I hear Brexit is definitely bringing firms here - how many people and how much office space seems hard to quantify. It's going to depend on the kinds of functions that are required here. For example Citi are looking to bring a significant back office function here even although they say it's nothing to do with Brexit.

Also the majority of IT firms (large and small) I know are intending to expand but are finding it nearly impossible to recruit - this is stalling their plans to move.

There's a lot of hoo-ha about much of it being pre-booked and Amazon is mentioned in particular. Amazon want everybody in their new building so it's quite likely they will move out of Burlington Plaza vacating the 5 floors they have in there. Similarly Linked In will be moving out of the offices they are currently in to occupy their new building when it is completed (presumably its included in the 3m figure). There's also rumours that Facebook are going to move out of their offices to a new premises in Sandyford, and Salesforce are also seeking to consolidate their offices in the same area. So in terms of the big companies there might not be a lot of net new requirement in D2. At the moment asking prices for commercial rent are high and the rush seems to be on to get buildings completed as quickly as possible - there's a limited supply of electricians and plumbers and everybody is trying to get to first fix as quickly as possible. I'm wondering if it's beginning to dawn on the developers that there might be a possibility of oversupply?

That 3m equates to roughly 20000 new employees - given that it's unlikely that many of them will be coming off the unemployment register - I'm guessing that they won't currently live here - so where are they going to live? And where are the planning initiatives to ensure that that accommodation is provided?


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 Post subject: Re: Commercial property crash?
PostPosted: Wed Feb 08, 2017 4:38 pm 
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metalmike wrote:
That 3m equates to roughly 20000 new employees - given that it's unlikely that many of them will be coming off the unemployment register - I'm guessing that they won't currently live here - so where are they going to live? And where are the planning initiatives to ensure that that accommodation is provided?

Cherrywood isn't far from Sandyford. That's 4000 units.

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 Post subject: Re: Commercial property crash?
PostPosted: Thu Feb 09, 2017 11:32 am 
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metalmike wrote:
That 3m equates to roughly 20000 new employees - given that it's unlikely that many of them will be coming off the unemployment register - I'm guessing that they won't currently live here - so where are they going to live? And where are the planning initiatives to ensure that that accommodation is provided?

seems like student accommodation is the fallback after grade-a office space - high-density, low-spec, short-leases (so no rental cap?), ready supply of foreign students etc.

you could argue that increasing availability of student accommodation will decrease pressure on traditional student rentals (houses / flats) but probably not significantly. there isn't a master plan.


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 Post subject: Re: Commercial property crash?
PostPosted: Thu Feb 09, 2017 11:37 am 
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Is this one of the few sectors of the Irish Economy vulnerable to a "soft Brexit"?


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 Post subject: Re: Commercial property crash?
PostPosted: Thu Feb 09, 2017 2:52 pm 
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metalmike wrote:
It's looking as if there will be around 3m square feet of new office space in Dublin this year.

From what I hear Brexit is definitely bringing firms here - how many people and how much office space seems hard to quantify. It's going to depend on the kinds of functions that are required here. For example Citi are looking to bring a significant back office function here even although they say it's nothing to do with Brexit.

Also the majority of IT firms (large and small) I know are intending to expand but are finding it nearly impossible to recruit - this is stalling their plans to move.

There's a lot of hoo-ha about much of it being pre-booked and Amazon is mentioned in particular. Amazon want everybody in their new building so it's quite likely they will move out of Burlington Plaza vacating the 5 floors they have in there. Similarly Linked In will be moving out of the offices they are currently in to occupy their new building when it is completed (presumably its included in the 3m figure). There's also rumours that Facebook are going to move out of their offices to a new premises in Sandyford, and Salesforce are also seeking to consolidate their offices in the same area. So in terms of the big companies there might not be a lot of net new requirement in D2. At the moment asking prices for commercial rent are high and the rush seems to be on to get buildings completed as quickly as possible - there's a limited supply of electricians and plumbers and everybody is trying to get to first fix as quickly as possible. I'm wondering if it's beginning to dawn on the developers that there might be a possibility of oversupply?

That 3m equates to roughly 20000 new employees - given that it's unlikely that many of them will be coming off the unemployment register - I'm guessing that they won't currently live here - so where are they going to live? And where are the planning initiatives to ensure that that accommodation is provided?


Interesting! I really doubt facebook would move from the so called silicon docks. I can see why they might do it in terms of price but they arent exactly short of cash and its a prestige thing for this young tech companies to be at the grand canal dock.

Are Amazon and LinkedIn currently moving? I saw LinkedIns San Francisco headquarters- bloody hell. You could fit the entire "silicon docks" inside that building alone!

http://uk.businessinsider.com/linkedin- ... ?r=US&IR=T


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 Post subject: Re: Commercial property crash?
PostPosted: Thu Feb 09, 2017 2:59 pm 
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The situation at present in Dublin is that there is still significant under-supply of quality offices. Dublin is expected to see around 4% new capacity per annum to 2020. I'd say by 2019/2020 we could see supply and demand come into balance with the new stock additions unless the economy continues growing at a strong pace.

Will there be another crash? It's inevitable at some stage. The property market is cyclical. That's just human nature. I doubt the next downturn will be as bad as the last one though. That was hopefully a once in a lifetime event.


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 Post subject: Re: Commercial property crash?
PostPosted: Fri Feb 10, 2017 12:35 pm 
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metalmike wrote:
There's a lot of hoo-ha about much of it being pre-booked and Amazon is mentioned in particular. Amazon want everybody in their new building so it's quite likely they will move out of Burlington Plaza vacating the 5 floors they have in there. Similarly Linked In will be moving out of the offices they are currently in to occupy their new building when it is completed (presumably its included in the 3m figure). There's also rumours that Facebook are going to move out of their offices to a new premises in Sandyford, and Salesforce are also seeking to consolidate their offices in the same area. So in terms of the big companies there might not be a lot of net new requirement in D2. At the moment asking prices for commercial rent are high and the rush seems to be on to get buildings completed as quickly as possible - there's a limited supply of electricians and plumbers and everybody is trying to get to first fix as quickly as possible. I'm wondering if it's beginning to dawn on the developers that there might be a possibility of oversupply?



Amazon have 3 floors (4 if you count the basement breakout area) but they have already said they are keeping their Burlington Plaza floors


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 Post subject: Re: Commercial property crash?
PostPosted: Fri Feb 10, 2017 1:41 pm 
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helimachoptor wrote:
metalmike wrote:
There's a lot of hoo-ha about much of it being pre-booked and Amazon is mentioned in particular. Amazon want everybody in their new building so it's quite likely they will move out of Burlington Plaza vacating the 5 floors they have in there. Similarly Linked In will be moving out of the offices they are currently in to occupy their new building when it is completed (presumably its included in the 3m figure). There's also rumours that Facebook are going to move out of their offices to a new premises in Sandyford, and Salesforce are also seeking to consolidate their offices in the same area. So in terms of the big companies there might not be a lot of net new requirement in D2. At the moment asking prices for commercial rent are high and the rush seems to be on to get buildings completed as quickly as possible - there's a limited supply of electricians and plumbers and everybody is trying to get to first fix as quickly as possible. I'm wondering if it's beginning to dawn on the developers that there might be a possibility of oversupply?



Amazon have 3 floors (4 if you count the basement breakout area) but they have already said they are keeping their Burlington Plaza floors

Thanks for the corrections. I presume they are tied into a lease on Burlington? With your corrections I reckon the new building must have nearly double the Burlington space, I believe they have other offices around the place but I don't know how big they are - this suggests Amazon are looking to increase their workforce in Dublin substantially - any view on that? The last figure I saw was 500 new jobs (last summer) - I don't know how many of these they have filled and how many are dependant on the new space. 500 would bring them to 2200 which is probably about the capacity of the new building.


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 Post subject: Re: Commercial property crash?
PostPosted: Fri Feb 10, 2017 10:10 pm 
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metalmike wrote:
helimachoptor wrote:
metalmike wrote:
There's a lot of hoo-ha about much of it being pre-booked and Amazon is mentioned in particular. Amazon want everybody in their new building so it's quite likely they will move out of Burlington Plaza vacating the 5 floors they have in there. Similarly Linked In will be moving out of the offices they are currently in to occupy their new building when it is completed (presumably its included in the 3m figure). There's also rumours that Facebook are going to move out of their offices to a new premises in Sandyford, and Salesforce are also seeking to consolidate their offices in the same area. So in terms of the big companies there might not be a lot of net new requirement in D2. At the moment asking prices for commercial rent are high and the rush seems to be on to get buildings completed as quickly as possible - there's a limited supply of electricians and plumbers and everybody is trying to get to first fix as quickly as possible. I'm wondering if it's beginning to dawn on the developers that there might be a possibility of oversupply?



Amazon have 3 floors (4 if you count the basement breakout area) but they have already said they are keeping their Burlington Plaza floors

Thanks for the corrections. I presume they are tied into a lease on Burlington? With your corrections I reckon the new building must have nearly double the Burlington space, I believe they have other offices around the place but I don't know how big they are - this suggests Amazon are looking to increase their workforce in Dublin substantially - any view on that? The last figure I saw was 500 new jobs (last summer) - I don't know how many of these they have filled and how many are dependant on the new space. 500 would bring them to 2200 which is probably about the capacity of the new building.



I work in BP (not for amazon) and i've a friend working for amazon, he's working on data centre planning, but he said the 500 are new and will go into the new building (Artium i think its called) but they are keeping their BP floors, so incremental headcount. I would imagine from the announcement last year they will be taking a sizeable chunk of that building.

I would expect the lease is 7 years with a break @ 5 years


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