Following World Green Building Week, we’re proud to highlight some of the sustainable efforts taking place across our office portfolio and the positive impact they continue to have.
At Bannon, we believe that exceptional property management is built on strong relationships and a shared commitment to continuous improvement. One of our standout examples is International House in the IFSC.
Trevor Nally has been instrumental to the running of International House for an incredible 26 years, first joining in 1998 as security and receptionist with Global Securiforce. Back then, communication was all done by phone (no emails!) and a single black-and-white BMS computer ran the systems.
When Bannon took over the Office Property Management in 2008, we quickly recognised Trevor’s dedication and local knowledge and we asked him to take on more responsibility. Since then, he has remained a constant through multiple transitions in security providers and owners. In 2017 the building was acquired by Intesa Sanpaolo and retained Bannon as the managing agent.
But the story of International House isn’t just about consistency, it’s about progress.
Intesa Sanpaolo have invested significantly in the building’s infrastructure and occupier experience. Most recently they have upgraded the ground floor shower and changing facilities and a brand new, modern reception area is currently in development. These enhancements reflect a continued commitment to quality, comfort, and the long-term future of International House. A workplace that is not just functional, but forward-thinking and occupier focused.
Trevor’s unwavering commitment, strong relationships with both occupiers and the owner, and his hands-on approach to caring for the building have made a real difference. His story is a reminder that behind every great building is someone who genuinely cares.
Thank you, Trevor for your dedication and to Intesa Sanpaolo for continually investing in the future of International House.
While Q2 2025 saw total office take-up in Dublin rise to 667,989 sq. ft., this figure is largely boosted by a single pre-let deal — Workday’s move at College Square. Excluding that transaction, market activity stands at just 250,000 sq. ft., reflecting a softer quarter.
Demand continues to centre on high-quality, Grade A space, with occupiers prioritising ESG compliance, flexibility, and hybrid-working adaptability. A shift in location trends also emerged, suggesting growing interest beyond the city core.
Overall, the market remains active but cautious, shaped by economic uncertainty and evolving corporate priorities.
To view the full report, please click here.
We are excited to showcase the Cadenza building in Dublin, part of Bannon’s office portfolio, where sustainable design meets urban biodiversity. 🌿
Designed by Henry J Lyons Architects and LEED Platinum certified, this thoughtfully renovated space features a lush courtyard with a living wall by Living Walls, a tranquil water feature by Fountainworks, and landscaping maintained by SAP Landscapes.
Bannon is proud to collaborate with these expert partners in creating a vibrant, eco-conscious workspace. With over 35% of the outdoor area dedicated to planting, accessible paths, and serene seating, Cadenza exemplifies how modern offices can promote wellbeing while supporting nature in the heart of the city.
The Dublin office market has had a strong start to 2025, with significant leasing activity and a clear trend towards high-quality, centrally located spaces. Notably, city centre areas accounted for 80% of office take-up in Q1, reflecting ongoing demand for accessibility, modern amenities, and proximity to transport links.
As the workplace landscape continues to evolve, businesses are prioritising Grade A office space to meet the needs of their teams. Dublin remains an attractive hub for both established and emerging industries, particularly in the TMT sector.
Exciting times ahead for the market!
To view the full report, please click here.
The Dublin office market experienced significant growth in 2024, with total take-up reaching 2.2m Sq.ft., an increase of approximately 780,000 Sq.ft. compared to 2023. This surge was primarily driven by the top 5 deals of the year, 4 of which were in excess of 100,000 Sq.ft. Alongside the pending Workday deal, which will add 425,000 Sq.ft. in College Green, these high-profile transactions point to a potential positive shift in the office market. As international businesses increasingly introduce return-to-office mandates, we’re seeing early signs of a market recovery. With the 5-year average at 1.9m Sq.ft. and the pre-Covid average of 3.15m Sq.ft., the outlook for Dublin’s office market in 2025 is looking promising.
Roderick Nowlan, Julia Halpenny, Cillian O’Reilly
To view the full report, please click here.
“I don’t see obsolescence happening in prime city centre locations. Because the values will support the costs required to convert them to a sustainability standard demanded by the market.
“But in locations where the values of offices are lower, they’ll struggle to absorb the same level of investment required. Because the cost of fixing a building will cost the same in a low-value location as a high-value location. So I think there’s a risk of viability obsolescence.
“If you’ve got to get to net zero, you can’t set the regulations lower so you’ve got to have some sort of grant or subvention to bridge the gap. If it’s financial obsolescence because the market values don’t support it, then it’s only through tax and grants that you can bridge that.
“The question for policymakers will be: do they want to do that? I understand the motivation to do that in city centres, because you need city centres to be vibrant. So you’d be very wary if large parts of your city centre office blocks becoming obsolete, because then you lose the jobs in the city centre and the vibrancy.
“Will they be as concerned about suburban locations or remote locations? I’m not sure they will. Traditionally, policymakers in Ireland like offices because offices mean jobs, and jobs are good.
“If we start seeing jobs leave locations because we’ve nowhere to accommodate them, then that’s when policymakers might start paying more attention.”
Although the Dublin office market experienced a significant drop in take-up this quarter, falling from 877,600 sq. ft. in Q2 to 551,200 sq. ft., sentiment remains positive for the prime ESG segment. A key driver of this quarter’s activity was LinkedIn’s assignment of 133,400 sq. ft. to EY at 2 Wilton Park, following Stripe’s move to the same development in Q2. It is also worth noting that the 425,000 sq. ft. Workday deal is excluded from this quarter’s figures as it has yet to be signed.
As a result, the underlying positivity can be seen in the significant increase in reserved space in Q3, totaling approximately 927,400 sq. ft. compared to 514,000 sq. ft. in Q2.
Q2 saw a very positive pick-up in office activity with take-up reaching over 870,000 sq.ft., a material increase on the mere 197,000 sq.ft. transacting in Q1. These figures were boosted by the inclusion of the sale of the 182,340 Sq.Ft. long vacant Seamark office Building in Elm Park which we understand was bought by the HSE for a step-down facility. In addition, in excess of 150,000 Sq.ft. of space was assigned to Stripe at Wilton Park, representing the first sign of large scale prime ESG take-up since covid. More importantly it is the first sign of the TMT sector beginning to become active again. This currently dormant sector usually represents approx. 50% of take-up Dublin figures as opposed to just 27% this quarter.
The average deal size in Q2 was 16,877 sq.ft. increasing from 5,640 Sq.ft. in Q1 and 7,774 Sq.ft. in the same quarter of 2023. As seen in previous quarters, small floorplates continue to dominate deal numbers with 22 transactions (out of 52) occurring in the <5,000 Sq.ft. bracket. This part of the market has actually remained relatively stable since the return to the office post-pandemic. Heading into Q3, there is still in excess of 500,000 Sq.ft. of space reserved, which creates some momentum for the second half of the year.
The Harcourt Building is an iconic 60,000 sq ft piece of office real estate in Dublin city. It features two retail units on the ground floor and boasts occupiers such as Investec, Bloomberg, Starbucks, and Foody’s Pharmacy. Led by Sarah Fortune, Bannon has been appointed as Property Managers for this prestigious asset.
Sarah has an in-depth knowledge of the building having originally managed it in 2007. She brings dedication and an exceptional office management service that will benefit both occupier and owner as the building undergoes significant capital expenditure. This includes a major refurbishment of the bespoke glass lifts and a comprehensive review to increase the building’s BER (Building Energy Rating), ensuring a sustainable future.
The Harcourt Building marks the addition of another property to the expanding Bannon office portfolio and we look forward to delivering a high standard of management services.
The office market experienced another subdued quarter with just 197,415 sq.ft. of space transacting over 35 deals. This represents a fall on the same quarter of 2023 where 283,734 sq.ft. of space transacted and a fall from the 357,694 sq.ft. experienced in Q4 2023. Small floorplates continue to attract high levels of demand with average deal sizes reaching 5,640 sq.ft., representing a material change from 8,129 sq.ft. last quarter.
On a positive note, heading into Q2, approx. 811,571 sq.ft. of space is “reserved” but this number appears to be continually rolling over into each subsequent quarter.
Dublin office market take-up reached 1,441,000 Sq.ft. for 2023. This take-up figure represents a 45% decrease on 2022 and a 56% decrease on Q3 2019 (pre-covid). Despite this however, the number of transactions remained steady with 202 transactions completing in 2023, compared to 219 in 2022 and 204 deals completing in 2019.
Smaller office space continues to dominate the market with 62% of transactions falling in the < 5,000sq.ft. range. The average deal size for the year reached 7,134.1 sq.ft. (-41% on 2022). There is currently 751,456 sq.ft. of space currently reserved in the capital across 77 transactions.
To view the full report, please click here.
**Exciting opportunity in the heart of the innovative Windmill Quarter in Dublin’s South Docks.**
We are pleased to present the final ground floor suite (front) of 50 City Quay, Dublin 2. Offering a superb waterside location suitable for both office and retail uses, extending to 692 Sq.ft.
Contact Lucy Connolly or Julia Halpenny to schedule an inspection and learn more about this exceptional space.
In early September I had the privilege of joining Bannon as a Graduate Surveyor. Having completed my internship in Bannon in third and fourth year as part of my Property Economics degree I was already familiar with the office setting and the familiar faces. The positive and friendly atmosphere made this transition seamless. Starting any job can be daunting but I have felt that in Bannon they have been very supportive in every way to help me settle into professional life.
I joined the Capital Markets and Office teams working alongside Rod Nowlan, Lucy Connolly and Julia Halpenny. Having previously worked in this area during my internship I was aware of the fast-paced industry of the investment world. From shopping centres to Georgian offices, I was well exposed to the different avenues of the property industry as well as gaining invaluable experience from my colleagues. It was very satisfying applying theory to practise moving from college to the working world as well as meeting new faces along the way and learning from their past experience.
Throughout my final year of college, I was always supported by my colleagues in Bannon who helped me throughout the year with advice for my thesis and various projects, their support was very reassuring in what proved to be a very stressful academic year. This help has been very much continued as I move into the next stage of my career as I have been assured that if I need anything, they are always there to guide me.
The positive culture in Bannon as well as the friendly and intelligent professionals that work here have definitely played a part in developing my growing knowledge of the property industry as well as helping build my character as a person. I am very grateful to Bannon for the opportunity and I look forward to continuing to work with the great Bannon team!
Author: Brian Morton, Graduate Surveyor, Bannon
Date: 17th October 2023
As investors, owners and occupiers are conscious of the environmental performance of their buildings, questions have been raised about the future of Georgian office space. Will these buildings become obsolete?
There is still a market for Georgian office space, however, that market has changed. A noticeable shift that the Bannon Office team is seeing in the letting patterns of Georgian office spaces is a departure from the conventional practice of leasing entire buildings to a more dynamic and adaptable approach of floor-by-floor rentals. This change reflects a growing recognition of the versatility and scalability that these historic properties offer. Businesses now have the flexibility to lease only the space they require, allowing for more tailored solutions to suit their specific needs. This trend is not only a reflection of the evolving preferences of tenants but also a testament to the adaptability of Georgian office spaces, which can seamlessly accommodate a variety of businesses in this modern age of flexible workspaces.
The notable shift toward floor-by-floor rentals in Georgian office spaces can be largely attributed to the increasing demand among companies to be located on a single, unified floor plate. While Georgian buildings exude historical charm and elegance, their architectural layouts often prove less suitable for larger businesses seeking consolidated office spaces. However, this transition aligns perfectly with the needs of smaller businesses and startups that value the intimacy and functionality of smaller floor plates. For these companies, Georgian office spaces are emerging as ideal options, offering the perfect blend of history, character, and practicality that caters to their specific spatial requirements, ultimately making them a sought-after choice in the ever-evolving landscape of modern office leasing.
This trend in the Georgian office market represents a compelling opportunity for small businesses to reclaim a central presence in the heart of the city. Georgian offices, with their affordable pricing ranging from €30-€45 per square foot, depending on quality, size, specifications, and location, offer an attractive alternative to the considerably more expensive €60-€65 per square foot rates associated with modern buildings.
Small businesses recognise the essential value of a city centre “hub” to conduct their operations effectively. This affordability enables them to thrive in prime city centre locations, fostering collaboration and networking while contributing to the revival of vibrant business communities in the heart of the city.
Author: Julia Halpenny, Surveyor, Bannon
Date: 9th October 2023
Dublin office market take-up reached 354,000 Sq.ft. for the third quarter of the year, bringing the year to date total to just under 1,100,000 Sq.ft. This take up figure represents a 20% decrease on Q2 2023, a 56% decrease on Q3 2022 and a 1.5% decrease on Q3 2019 (pre-covid).
Q3 is traditionally the most subdued quarter following the summer break, however, transactions have remained steady with 54 deals recorded, resulting in an average deal size of 6,500 Sq.ft. (-15% on Q2 2023). There is currently 717,000 Sq.ft. reserved across 75 transactions.
Sretaw PE (Private Equity), an investment and property development company headed up by Eamon Waters, has secured three new tenants for its newly-refurbished offices at 12 Duke Lane in Dublin’s Royal Hibernian Way. Theratechnologies, Dynamo, and AGF International Advisors Company Ltd have each agreed deals to occupy the property at rents ranging from €538 to €614 per sq m respectively.
Commenting on the agreement of the lettings at 12 Duke Lane, Lucy Connolly of Bannon, who represented the landlord, said: “Despite recent market commentary [on the office market] the level of inquiries we received was exceptional. It highlights the demand at present for small, modern, centrally-located floorplates. The rents achieved were at quoting levels and above.”
The new tenants at 12 Duke Lane were represented by David O’Malley of QRE, Shane Bourke of Irish Office Space and Emma Byrne of Finnegan Menton respectively.
Developed originally in the mid-1980s, 12 Duke Lane comprises 533sq m (5,737sq ft) of office accommodation over four floors and forms part of the wider Royal Hibernian Way scheme. The development, which is arguably best known as the location of the Davy Stockbrokers head office, extends to an overall area of 8,630sq m (92,888sq ft) and also includes around 1,950sq m (21,000sq ft) of retail and hospitality space.
The retail quarter is occupied by a number of well-known brands including Boylan’s Shoes, Carol Clarke Jewellers and Leonidas Chocolates, while the hospitality offering includes the Marco Pierre White steakhouse; Isabelle’s restaurant; and the Lemon & Duke bar, owned by Noel Anderson and his business partners, former rugby internationals Sean O’Brien, Jamie Heaslip and Rob and Dave Kearney.
Mr Waters acquired Royal Hibernian Way from Aviva Investors in 2021 for about €74 million. The agreement of the deal came just weeks after he and US private equity firm Blackstone secured the sale for €1.4 billion of Beauparc Utilities, which Mr Waters had founded, to Australian financial services giant Macquarie. The deal for the company which owns the Panda and Greenstar waste firms in Ireland is understood to have provided Mr Waters with a windfall of about €367 million, based on company filings prior to the announcement.
Article published by The Irish Times
Quarter 2 Dublin office take up exceeded 440,000 sq.ft. resulting in an increase in average deal size to 7,720 sq.ft. (24% increase on Q1 2023)
City Fringe and Suburban markets performed particularly well this quarter accounting for 60% of all take-up. Dublin continues to attract a diverse mix of industries with professional services, finance and state agencies the most active sectors this quarter with TMT accounting for just 6% of total take up, a decrease of 35% from the same quarter of 2022. We commence Q3 with over 665,000 sq.ft. of office space currently reserved.
See full details below together with expert insight from Lucy Connolly.
To view the full report, please click here.
The Government has been grappling with a housing shortage for several years. As the demand for housing continues to outstrip supply, creative solutions are needed to address this pressing issue.
One potential solution that is gaining traction is the conversion of office spaces to residential units. This has come to the fore over the last number of weeks as the Government faces unyielding pressure to tackle the accommodation shortfall. Minister for Housing Darragh O’Brien is reportedly considering making planning exemptions to rules which would apply to repurposing office space to housing.
In an article in The Irish Times on May 22nd, it was reported that the Minister has “lobbied his Cabinet colleagues Simon Coveney, the Minister for Enterprise, Trade and Employment, on the issue, seeking his support for a plan that would convert offices built during the recent construction boom but are now underutilised”. The question is, is it feasible to repurpose a recently constructed Dublin office building into residential use?
[ ‘I never imagined such places existed’: What’s it like living in a converted office block? ]
The assumption here is that there is an oversupply of recently built office accommodation in Dublin city centre, but that is simply not the case. Offices built in the boom are in the main environmental, social and governance compliant (ESG-compliant), sustainable buildings. As has been widely reported by many in the property industry, these are and will be the buildings that are in demand for office use. The location of these buildings further enhances their desirability for that use, as we are seeing increased demand for well-located city-centre office buildings due to the availability of employee amenities and unrivalled transport links.
Converting offices into residential units presents an opportunity to address this but there are challenges involved, and as we have seen from other countries, caution is advised for such projects
This movement in the market provides vacant possession to the owner to allow for redevelopment or refurbishment of these brown buildings into ESG-compliant offices or alternative uses. This is where the question of residential conversion is most relevant…residential conversion will be most practical where the office value is lowest and the conversion costs to residential use are more sensible than the cost of “greening” the building for office use. Ultimately, it is about sorting the “wheat from the chaff”.
[ Michael McDowell: Nobody is thinking about the aesthetics of our cities ]
Working with our sister company Evia Sustainability consultants, the Bannon office team is assessing the cost and practicality of bringing older buildings up to standard from a green perspective, and what that entails. If the maths don’t add up – that is, if the cost of greening an office asset exceeds the end value – then the owner is looking at a stranded building which is then a candidate for residential conversion.
Without a doubt, Dublin’s housing shortage necessitates innovative solutions. Converting offices into residential units presents an opportunity to address this but there are challenges involved, and as we have seen from other countries, caution is advised for such projects. Consideration must be given to zoning, building and planning guidelines and regulations. This consideration must relate to the practicality and ability to convert but also to the social factors, with access to amenities, transport, employment opportunities and social connections fundamental for the residents of the schemes and thus their successful transformation.
[ The Irish Times view on turning offices into homes: unlikely to provide a quick solution ]
Embracing this potential solution and implementing it correctly may hold the key to not only helping to solve a housing shortage but also providing options to owners of potentially obsolete office buildings.
Lucy Connolly is divisional director and head of offices at Bannon property consultants
Following a subdued Q1, Dublin office take up for the second quarter of the year reached 440,000 sq.ft. across 57 transactions. This brings the year to date figure to 724,500 sq.ft. Whilst Q2 take up is 53% ahead of Q1 figures, it reflects a H1 decrease of 28% versus the same period last year.
Dublin continues to attract a diverse mix of industries with professional services, finance and State agencies the most active sectors this quarter with TMT lagging behind significantly, accounting for just 6% of total take-up.
The effect hybrid working and ESG has, or will have, on office demand from office occupier, investor and owner standpoints cannot be considered in isolation. These influences must be considered within the wider office market ecosystem and how they operate in tandem to drive occupier decision making at lease event dates. The Covid Pandemic brought an instantaneous change to how we work whereas ESG requirements and regulations have been coming into the market at a steadier rate. While there is also uncertainty around the future of working models, that can be adapted and changed rapidly, there is no uncertainty about the increasingly important and dominant role ESG will play in the office sector. The ESG roll out will be slower and changes can be anticipated, however the ability to bring the stock to standard is a far more timely and resource intensive exercise.
Hybrid working for businesses will effectively assess how staff utilise office space as a resource to produce output. Ultimately it is the company who can decide how to implement their working models and the decisions will be led by the type of work carried out by the business, the need to attract and retain talent and the model that allows the business to grow and produce output efficiently. Both staff and workspace are a factor of production for a business and how the two are utilised against each other effectively to generate product should ultimately be the key focus of any commercial business. This should craft the post-pandemic workplace in the years ahead and this will likely differ industry by industry.
ESG considerations will continue to become more prominent drivers in the decision-making process for both occupiers, owners and investors. Currently, ESG in commercial real estate is very much lead by the private and financial markets, with factors such as corporate mandates and lender requirements influencing the demand for ESG grade space. It is envisaged that the regulatory environment (in an EU context) around occupation and investment will become more scrutinous and this will further drive the demand (and requirement) for ESG grade space in the future.
Occupiers will be looking into the impacts, whether they be positive of negative, that revised working models have on their ability to create an attractive and productive workspace as well as any ESG led requirements that are being implemented on a company specific or regulatory basis. The implementation of these will likely crystallise at either a lease break or expiry where spatial requirements can be most practically revised. Property owners will have to be cognisant of their occupiers’ requirements against key lease dates and how these correspond with asset management strategies to protect both the rental and market value of the building. Alternatively, investors must consider how to preserve or improve on an asset’s income at purchase or where opportunities may lie in bringing brown buildings into a green market.
Bannon have a suite of services available to assist CRE owners, occupiers and investors in strategic real estate decisions and ESG insights. Please feel free to reach out to discuss by emailing consultancy@bannon.ie.
Author: George Colyer, Surveyor, Bannon
Date: 16th June 2023
The Covid-19 Pandemic has led to a paradigm shift in the traditional approach to office-based work. Following the initial ‘work from home’ requirements during the Pandemic, many businesses have since adopted alternative working models away from the traditional ‘in the office at your desk’ to models such as shifting staff to full work from home, flexible working options and hybrid working models.
The widespread shift to more flexible and agile working models has moved the concept of ‘work’ from a physical place to an activity. The net effect of this does not mitigate the need for a physical office, rather it changes the role and function the office plays in the business and how the space is utilised to meet staff working habits and models and drive business goals. While the full effect of Covid-19 on working models is yet to be seen, the consensus of many businesses and organisations has been to adopt a form of hybrid working to give staff more flexibility and that this is required in order to maintain and attract talent.
Hybrid working models will not necessarily impact an office development’s occupational capacity, rather it allows the building to attract occupiers with larger workforces. For example, if a development with a capacity for 1,000 workers is occupied by a business that implements a 50/50 split between WFH and office, the scheme can, in theory support an occupier with a 2,000 strong workforce. In practice this may be less as businesses will require full attendance by teams at different times and we have already seen the TWT (Tuesday, Wednesday and Thursday) phenomenon at play as workers prefer to work from home on Mondays & Fridays. Despite this, the classic rule of thumb of allocating 10-15 sq.m. of space per employee to gauge an occupier’s spatial requirement is clearly being challenged. Paradoxically, there may be a positive spin off for the locations where these offices are located as the total number of distinct visitors during the week increases.
There is still uncertainty around the long-term effect of Covid-19 on long term office working models. This is manifesting itself in the leasing environment through shifting occupier space requirements, greater lease flexibility and increased demand for fitted-out spaces. Businesses will use lease events such as expiries and break options to rationalise their workplaces to reflect their adopted work models. As workplaces continue to adapt and adopt modern working practises it is important for occupiers to be cognisant of the spatial requirements needed to accommodate and attract the modern workforce and for investors and owners to be cognisant of the effect these work models will affect demand levels and lease events.
If you wish to discuss developments in the office markets further, please contact offices@bannon.ie.
Author: George Colyer, Surveyor, Bannon
Date: 2nd June 2023
M50 Business Park provides c. 18.890 sq. ft. of modern fitted office accommodation on new lease terms. Occupying a high profile location at the junction of Ballymount Avenue and Ballymount Road Upper, the available space provides both open plan and cellular office accommodation, as well as meeting rooms and a canteen facility. Offices available from 9,000 – 18,890 sq.ft. with generous car parking provisions.
For more information contact Lucy Connolly or Julia Halpenny.
Bannon’s latest Office Pulse is now live.
Take up for the first quarter of the year reached 278,000 sq.ft. across 45 transactions, representing a 45% decrease on Q1 2022. Deal sizes have decreased this quarter with 76% of transactions falling into the sub 5,000 sq.ft. bracket resulting in an average deal size of 6,300 sq.ft. Lease flexibility continues to be the dominant driver in demand. There is over 600,000 sq.ft. currently reserved (71 Transactions) which should boost Q2 figures.
See full details below together with expert insight from Lucy Connolly and Cillian O’Reilly.
To view the full report, please click here.
The Dublin office market is experiencing a game of musical chairs as environmental, social and governance (ESG) goals and policies drive office occupiers to relocate to more sustainable, greener buildings. This has been further accelerated by changing occupier demands. It has created a redevelopment and refurbishment opportunity that attracts occupiers from older, so-called brown buildings.
Many owners and occupiers recognise the opportunity to achieve their ESG goals and policies while reducing occupational costs. Moreover, the ability to attract high-quality occupiers is only possible with a green building. The game of musical chairs provides vacant possession to allow the redevelopment or refurbishment of brown buildings, thus enhancing the value of the asset.
One example of this trend is AIB’s decision to vacate Irish Life’s 1 Adelaide Road base and consolidate to 10 Molesworth Street. This move allowed Deloitte, which occupies Deloitte & Touche House on Earlsfort Terrace, to commit to the redeveloped 1 Adelaide Road. As a result, the Earlsfort Terrace property will become available to Iput for its proposed redevelopment.
[ Older office buildings can be as good as new. They’re often even better ]
Another example is the relocation of An Garda Siochana from its Harcourt Street headquarters to the recently completed Walter Scott House on Military Road. Hibernia Real Estate Group swiftly demolished the building, paving the way for the construction of Harcourt Square, which will become KPMG’s new Dublin office upon completion. This shift will result in Kennedy Wilson achieving vacant possession of KPMG’s office on Stokes Place, which received the green light from An Bord Pleanála earlier this year.
Waterfront South Central in Dublin’s north docklands is set to become the new European headquarters of Citi Group. The deal was made with Ronan Group Real Estate (RGRE), which acquired Citi Group’s premises at 1 North Wall Quay. The current premises will no doubt be redeveloped or refurbished and reintroduced to the market as a green building.
Aside from the discussed redevelopment opportunities, there are significant quantities of grey space available, including Fibonacci Square, which is being leased by Meta; 1 Cumberland Place, leased by Twitter; and 2 and 3 Wilton Park, leased by LinkedIn. This Grade A ESG-compliant space will undoubtedly be involved in the next round of musical chairs in the Dublin office market. As occupiers of older buildings take up this space, it will free up further development opportunities. The attractiveness of these options to developers will depend on the specifics of the building, location, floor-to-ceiling heights, and the practicality and cost of upgrading them to either new offices or alternative uses.
The game of musical chairs has created opportunities for owners and occupiers to achieve their ESG goals and policies while simultaneously reducing occupational costs. This trend also presents an exciting opportunity for the redevelopment and refurbishment of brown buildings and the enhancement of asset value.
Lucy Connolly is divisional director and head of offices at Bannon
Bannon’s latest Office Pulse is now live!
This month’s Office Pulse includes expert market insights from Lucy Connolly and Cillian O’Reilly. In this edition we ask; As tech sector expansion slows down, is this the end of the super deal? We also look at the data behind a two-tier occupational office letting market.
To view the full report, please click here.
Congratulations RBK Chartered Accountants on your new HQ! It was an absolute pleasure to work with the RBK team on this acquisition and to secure a fantastic new office for your next phase of growth. We wish you all continued success in Termini, Sandyford!
The first Bannon Dublin Office Market Pulse of 2023 is now live. Dublin office market take up exceeded 2,650,000 sq.ft. in 2022, boosted by a busy Q4 with over 804,000 sq.ft. transacting in the final quarter. See full details below together with expert insight from Lucy Connolly.
To view the full report, please click here.
Dublin Office market take up for 2022 exceeded the ten year moving average figure and surpassed 2,600,000 sq.ft. by year end. This figure was boosted by a busy Q4 with over 804,000 sq.ft. transacting in the final quarter of the year. This was largely attributable to the two largest transactions of the year, Citigroup’s acquisition of 300,000 sq.ft. at Waterfront South Central and SMBC Aviation Capital’s leasing of 135,000 sq.ft. at Fitzwilliam 28.
Whilst not back to pre-covid levels, take up has increased by 53% on 2021 figures and we are seeing further stability in the market with an upsurge in activity from the Professional services and financial sectors.
The Bannon Dublin Office Market report is available now. Take up for the third quarter reached 819,000 sq.ft. representing a 60% increase on Q2 and a 77% increase in the same period last year. Lease flexibility continues to be sought in the short term as companies continue to assess their office requirements as remote and hybrid models are fully determined.
We are seeing an increase in activity from the financial and professional services sectors, many of whom are seeking to satisfy their ESG policies in terms of their real estate decisions.
To view the full report, please click here.
There is a puzzle which involves moving the one empty space around a collection of tiles to make the correct image and it comes to mind when looking at the near-term future of the Dublin Office market.
The headline stats on the office market will tell you that there is 5.6m sq.ft. under construction but that 2.2m of it is pre-let. What these stats hide is that some of that pre-let space is actually available. Take 2 & 3 Wilton Place which are currently being built by IPUT for LinkedIn who have advised the market that they no longer want to occupy these buildings. IPUT’s investment is secure as the buildings are effectively let to a Microsoft business who are legally committed but from the market perspective 330,000 sq.ft. has just moved from the pre-let column to the available to let column and it’s not just buildings that are under construction. As agents on the redevelopment of the ESB headquarters we pre-let 28 Fitzwilliam Place to the tech company Slack subsequently selling the investment to the large European Investors Amundi. Slack were subsequently bought by Salesforce and 28 Fitzwilliam although fully complete since 2021 has never been occupied. To these examples can be added the buildings in the Facebook / Meta HQ in Ballsbridge which they have decided not to occupy although it is not clear that they will be bringing these to the leasing market or just mothball them for the time being.
What this adds up to is a much greater availability of brand-new top-grade office stock than the headline stats would suggest. We have no doubt that all this brand new ESG compliant stock will be occupied. They are good quality buildings in good locations that comply with the sustainability needs of large corporate occupiers. What it will do however is speed up the movement of the tiles around the board. It accelerates the ability of large corporate occupiers currently residing in non ESG compliant buildings to move to the buildings they need. When the image is complete the empty tiles will correspond to the older non ESG compliant buildings which will need to be upgraded, converted to alternative uses or generate a much lower rent than they have achieved heretofore.
At Bannon the Office & Consultancy teams are actively working with clients to solve the more complex problem, how to generate the best return from well located office stock that fails the sustainability test.
Author: Neil Bannon, Executive Chairman, Bannon
Date: 14th November 2022
A cursory look at both the third quarter and year-to-date property investment volume data would indicate that it’s a case of “steady as she goes” in the market but as always, the proverbial devil is in the detail. When you pull back the curtain on the statistics, the current institutional investment mantra of “beds, sheds and meds” is reflected in the true underlying trends.
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At first glance, investment volumes for the third quarter show that offices hold the lead at 37.7 per cent closely followed by residential at 36 per cent. Year to date shows an even stronger position for offices at 43.5 per cent and residential at 29.9 per cent. However, two key transactions shroud a huge shift in the market and highlight the importance of both the residential sector and the movement in non-office investments.
If we exclude the €1.089 billion Hibernia Reit (Hibernia Real Estate Group) transaction from the second quarter (which arguably should not have been included as it was a corporate acquisition) and the one-off €500 million Salesforce headquarter deal from the third quarter, the lay of the land changes dramatically. The result is that the residential sector exceeds 50 per cent of third-quarter volumes and 44.4 per cent of the year-to-date volumes. Conversely, the office sector falls to a mere 17.7 per cent of the quarter and 17.6 per cent for the year-to-date.
This is a dramatic transition for the offices sector, which accounted for 39 per cent of market transactions in 2020 and 28 per cent in 2021. A number of factors are likely contributing to this shift. Among them is the depleting availability of developer-led schemes for trade, concern attaching to the occupational impact of the working-from-home (WFH) phenomenon, and the unknown impact of required ESG retrofitting to standing stock.
As a consequence of the decline in the office sector’s relative importance we are seeing a number of alternative sectors come to the fore. The industrial sector has seen the reverse trend as the desire for sheds from institutions is unabated and the supply side is relatively elastic. It has grown from a mere 4 per cent in 2019 and 8.8 per cent in 2020 to 13.1 per cent currently, almost on a par with office. Similarly, the healthcare sector, from near obscurity, comes to represent almost 8 per cent of investment volumes.
When you add all this up, excluding the Hibernia and Salesforce deals, “beds, sheds and meds” made up over 65 per cent of investment-transaction volume in the year to date. When you consider that sheds and medss collectively amounted to mere rounding errors in the investment statistics 10 years ago, it demonstrates just how much the real-estate landscape has shifted and reinforces the sheer naivety of assuming that the market today is a clear indicator of future trends
The increased availability of so-called “grey space” and sublet opportunities, eg LinkedIn in Wilton Place, may further reduce speculative office development and consequent supply. The roll-out of primary healthcare centres across the country will support continued growth in investment the healthcare sector. These trends point to the future of the investment market and are the current focus of our research and consultancy team.
The Dublin office market performed strongly in Q3 with take up reaching 819,337 sq.ft. across 60 transactions, bringing the year-to-date figure to just over 1,820,000 sq.ft. To put this figure in context, it represents a 77% increase on Q3 2021, a 256% increase on Q3 2020 and 134% increase on Q3 2019 levels (pre covid).
As we move forward into the final quarter, there is over 770,000 sq.ft. of office accommodation reserved and active requirements of c. 3 million sq.ft. which bodes well for the remainder of the year.
Following an extended period of “head burying”, most property fund managers are bracing themselves for material negative valuer adjustments across their portfolios (with the potential exception of retail which has already been massively discounted). This trepidation is clearly derived from the escalating impacts of the war in Ukraine, spiralling inflation, rising interest rates, looming recession in both the US and across the EU, and now the calamitous UK economic situation. However, there is one area of the property market where the impact of these issues will be magnified and, to add to its woes, systemic shortfalls exposed which have been historically overlooked. This is the area of non-ESG (environmental, social and governance) compliant offices, many of which are already on their way to becoming “stranded assets”.
If a building does not meet ESG requirements and the cost of improving it to satisfy these exceeds the required market return, the building in question can be considered a stranded asset. In the valuers’ defence, the office occupational market has been very slow in adjusting to the environmental agenda
Until relatively recently very few valuers were appropriately differentiating between offices that could satisfy occupier ESG requirements and those that could not. This is especially the case for those perceived “modern schemes” constructed in the past 10 years but whose energy conservation specification does not satisfy the 2017 Part L building guidelines — the effective start of the nZEB (nearly zero energy building) standards. Even if ESG upgrades were accounted for, the costs being applied were often only a fraction of the reality. These costs, which include the likes of glass/facade replacement, plant enhancement/replacement, electrical hardware upgrades, new BMS (building management systems), PV (photovoltaic) installation, rainwater harvesting and general water conservation initiatives are now materially higher and rising.
A scarcity of materials and competition for labour and expertise is unlikely to see these costs abate in the next few years as the scale of the issue becomes apparent. The Bannon office team estimates than less than 15 per cent of Dublin’s current office stock is actually ESG compliant.
In the valuers’ defence, the office occupational market has been very slow in adjusting to the environmental agenda, and rent is ultimately the primary driver of value. However, since the ramifications of the EU’s sustainable finance directive (adopted in April 2021) and the UK’s escalating Minimum Energy Efficiency Standards (MEES) have become clearer, and with various recent high-profile climate events driving public (and corporate) opinion, a sea change in attitudes has swept over the occupational market.
If we look back at this quarter’s office lettings, the transition in the market’s thinking is clear. There was almost 400,000sq ft of take-up in Dublin’s core central business district (Dublin 1, 2 and 4) with 86 per cent of this accounted for by ESG-compliant space. Clearly there is now a firmly established two-tier office occupational market in the city centre, namely ESG-compliant offices and the rest. Interestingly, from a further review of this quarter’s take-up, it is clear that ESG is still not a priority in the more “value-focused” suburban locations with a mere 15 per cent of the 275,000sq ft of take-up outside of Dublin 1,2 and 4 being ESG-compliant. However, the pressure on all occupiers is likely to intensify further in January 2023 when the rest of the taxonomy regulations — technical screening criteria (TSC) and regulatory technical standards (RTS) — and the second phases of financial services sector regulation and the FCA climate-related disclosure regime come into effect.
This will be particularly difficult for suburban assets to react to as the rent available in these locations is unlikely to be sufficient to support ESG retrofits.
The extent of this micro-sector’s woes doesn’t stop there either. The “latent carbon” movement is also upon us meaning that it will become increasingly difficult to knock down existing buildings. Increased density and height can support the economics of ESG which is often maximised by demolition. The increasing focus on preserving latent carbon will mean the best that will be on offer for these buildings is to be extended vertically and horizontally, which will have both structural and planning limitations. As a consequence, valuers are finally consulting their quantity-surveyor colleagues to determine the true scale of the issue. The “tic-tic” of the rollercoaster looks to be falling silent for this part of the market, and I’m not sure the current non-ESG compliant office owners will enjoy the ride to come.
There will however be a huge opportunity for those with the skills to efficiently transition these buildings back towards the institutional mainstream. In this regard, valuing and selling these assets will require an in-depth analysis of the true costs associated with bringing them up to standard. For some, the maths just will not work, while for others pursuing an alternate use may be the only avenue open to them.
The Bannon Dublin Office Market report is available now. Take up for the second quarter of the year reached 511,549 sq.ft. across 61 transactions, bringing the year to date figure to just over 1,000,000 sq.ft. A substantial increase on the same period last year, when just 232,523 sq.ft. of take up was recorded.
Market sentiment is improving quarter on quarter as demonstrated by an increase in take up and occupier demand, with over 1,300,000 sq.ft. currently reserved.
To view the full report, please click here.
Take up for Q2 was largely on par with Q1 of this year with 511,549 sq.ft. of office accommodation transacting across 61 deals, bringing the YTD take up figure to just over 1 million sq.ft. Whilst not back to pre-covid levels, demand in the marketplace continues with over 1.3 million sq.ft. currently reserved.
2nd Floor, IFSC House, Dublin 1 – IFSC House is a high-profile landmark building with stunning river views, offering a prominent corporate HQ opportunity in the centre of Dublin’s International Financial Services Centre. Extending to over 22,200 sq.ft. the 2nd floor office is available now by way of Sub-Lease or Assignment.
For further information contact Lucy Connolly or Ros Tierney on 01-6477900.
The commercial rental market is on the cusp of significant change. The true impact of Section 132 of the Land Conveyancing Reform Act 2009 is now impacting all reviews. Learn how our highly experienced team can help you with your rent review.
To view the full report, please click here.
Dublin office market take up has exceeded 490,000 sq.ft. across 47 transactions this quarter. Whilst this is a positive start to the year when compared to Q1 2021, it does represent a 54% decrease on Q1 2020 (pre-covid) figures. However, we would note that there is over 1,200,000 sq.ft. of office accommodation currently reserved and a number of unfulfilled requirements in the market, which should result in a more robust Q2/Q3 in terms of take up.
In our latest Dublin Office Market Review and outlook, we examine activity in the sector over the last 12 months and look at some key predictions for 2022.
To read the full report, click here.
Pan European investor and asset manager M7 Real Estate has paid just under €15 million for two office blocks in south Dublin.
Developed in the late 1980s as part of the wider Merrion Shopping Centre scheme, the Nutley and AIG buildings comprise an overall floor area of 4,016sq m (43,235sq ft) along with 83 undercroft car parking spaces. The subject property is currently generating total rental income of €1,439,932 a year.
The Nutley Building is let to a number of occupiers including Bonkers Money, the Japanese Embassy, the Austrian Embassy and Global Standards while the AIG Building is let to a single tenant with a number of sub leases in place.
While The Irish Times reported that the deal for the two offices was close to being finalised in October 2020, it is understood the proposed transaction was completed only in recent weeks. Commercial real estate consultants Bannon handled the sale.
Following its latest purchase, M7’s Irish portfolio now comprises 18 assets extending to just under 1,100,000sq ft, primarily in industrial and logistics space.
In October 2020, the company paid about €13.5 million for the long leasehold interest of five fully let units at the Sandyford Business Centre in south Dublin.
The purchase of the portfolio gave it control of five of the scheme’s 10 units along with an associated provision of 200 car parking spaces. The portfolio’s office accommodation covers a combined area of 4,532sq m (48,786sq ft) and is producing annual rental income of €1,192,578 with a weighted average unexpired lease term of 5.8 years, with breaks at 4.6 years.
In August 2020, the company paid €6.25 million for the former Kildare headquarter office and distribution facility of convenience store operator ADM Londis, while in January 2020 it acquired the Primeside Park industrial estate in Dublin for €6.75 million.
The group also controls the Century Business Park in Finglas, which it acquired for €4.47 million in September 2019, and the Westlink industrial estate in Dublin 10, which it bought for €13,870,000 in 2018.
Its first investment here came in 2017 when it bought Fumbally Lane, a combined office and residential development in Dublin 8 which was on the market for €24 million. M7 sold Fumbally Lane to BCP Asset Management in 2018 for €33.5 million, following the completion of a comprehensive asset management programme which enabled the property’s vacancy rate to plummet from 17 per cent to 2 per cent through the addition of 19 new tenants, and its annual rental income grow by €1.14 million.
M7 operates across 14 countries. It manages a portfolio of about 835 retail, office and industrial assets with a value of about €5.1 billion.
Take up for 2021 exceeded 1,700,000 sq.ft. There was a notable increase in market activity from H2, with Q4 attributing over 1,000,000 sq.ft. to the final years take up figure. This was largely boosted by 2 transactions in excess of 200,000 sq.ft. (representing 29% of total take up).
We are off to a strong start for 2022 with over 800,000 sq.ft. of accommodation currently reserved.
With works now complete, we are pleased to welcome Greenlight Reinsurance as the first occupier of #50CityQuay, the latest company to join the #WindmillQTR. With two further floors currently reserved, we have one ‘own door’ office floor available to lease (1,313sq.ft). Please contact Lucy Connolly or Ros Tierney for further information on 01 647 7900.
The Bannon office team are pleased to present a number of high quality Georgian floorplates. Located in prestigious locations in Dublin’s Central Business District, we can cater for leasing requirements from 590 sq.ft. to 2,135 sq.ft. Contact Ros Tierney or Lucy Connolly today for further information.
Some of the Bannon team inspecting Fitzwilliam 28 this week which is nearing PC. The new ESB Headquarters raises the bar for sustainable office development in Ireland. Proud to have been part of the team to bring this exciting development to fruition since 2011.
Take up for Q3 has exceeded 460,000 sq.ft. across 53 transactions. This represents a 92% increase on Q3 2020 but more importantly a 26% increase on Q3 2019 (pre covid).
This quarter has seen a significant jump in activity in the suburbs, particularly in the South Suburbs which accounted for 41% of all transactions.
As we enter Q4 there is over 1,000,000 sq.ft. reserved, this coupled with an increase in active requirements and the continuation of a phased return to the office should bode well for the office market for the remainder of the year.
The ‘Office’ has featured heavily in the press over the past 18 months and indeed in everyday conversation, as working from home became a necessity for most office-based employees. Countless articles and blogs have been published with sensationalised headlines such as “What will the office market look like after the great remote working experiment?” to “Productivity of remote workers could determine the fate of the office market”.
Our view is that the office will now assume a wider function with a more consolidated, improved, and focussed environment to manage the challenges of hybrid working and employee engagement going forward.
Over the last 6 years, Irish office developments have evolved considerably with numerous exceptional schemes being delivered. These buildings have attracted leading global firms to Dublin in particular and the expansion of many more as they continue to increase their presence and EMEA HQs. Due to the new standards set by these firms, occupier expectation has increased which has resulted in developers placing more emphasis on emulating what the tech sector has traditionally offered to their employees: amenity, a perk, a perceived life work balance. They have achieved this through the accumulation of amenity-based facilities such as: high end shower and bicycle facilities, concierge services, tenant events, better reception areas, coffee docks and townhall spaces. This together with improved building standards and environmental and sustainability credentials coming more to the fore has given rise to the creation of world class and award-winning office buildings in Ireland.
However, the office sector is about to enter a new phase. Traditionally offices required a centralised location which has been challenged by technology. Prime offices were traditionally clustered around transport infrastructure in a central business district where multiple advantages of proximity to transport, telecommunication infrastructure and labour combined to attract a premium from occupiers, but technology is challenging the need for multiple office functions to take place in a centralised location. This need must be replaced with desire. The user of the building now places more focus on it being a positive environment for their business and their teams.
Like the revolution that has taken place in the retail market where the ability to shop online challenged traditional assumptions on the functionality of real estate, investors in the office sector must adopt an experience focussed strategy. The nascent breakthroughs the sector has made recently to enhance user experience must be expanded upon, implemented at an early stage in the development process and maintained through a proactive management regime.
As real estate’s function evolves, how do we deliver a successful solution for this next phase in the evolution of the office? As mentioned previously User experience is key and this can be achieved through many innovations. These changes do not have to be seen as challenges but as opportunities to be proactive and differentiate a proposition from that of their competitors.
Through Bannon’s extensive property management portfolio and experience in working as design consultants on several large new schemes, our role in working with investors and developers on identifying and enhancing the user experience for office occupiers and their teams has come into sharp focus.
For the investor the asset cannot be just about place making or achieving optimal rental outcome. An investor must consider it as a longer-term play by exploring tenant optimisation i.e. perhaps leasing a portion of the scheme at lower rents to amenity-based occupiers to carefully coordinate a desired aspirational environment. Correct implementation of property and asset management functions is fundamental, they are key to ensuring the functionality for their occupiers from both a corporate and personnel perspective. Communication with occupiers is essential as creating positive experiences for users of the buildings will in turn lead to greater loyalty and enhanced values.
As we move closer to a return to the office in whatever form, recruitment and retention will continue to be the driving force in office acquisitions. Therefore, to adapt to a hybrid model, promote productivity and engage with the ‘new employee’, the office needs to evolve to reflect what people want to use every day. The era of passive office investment is over.
Lucy Connolly is a Divisional Director at Bannon. She has 15 years’ experience acting for a wide variety of private clients and companies in relation to commercial property, office acquisitions, sales and lettings. Contact Lucy by email on lconnolly@bannon.ie
We were delighted to hear our Executive Chairman Neil Bannon interviewed on Executive Chair, part of Newstalk’s “Down to Business” radio show on Saturday. Neil and Bobby discussed the big changes to the nature of the Office and how it will move from being functional to experiential. He provided the valuable insight that Investors and Employers are now going to be more concerned about the experience of being in the office. It will no longer simply be a place with a desk but instead somewhere you look forward to visiting in the new hybrid working world.
As a result, he mentioned that Bannon had seen a notable increase in clients seeking to have the firm leverage our market leading Retails skills and apply them to the Office. Other topics covered included how Neil’s Law degree helps with complex lease and purchase negotiations, setting up Bannon with his father Joe and how an independent, Irish owned business, excels at competing with multi-national competitors in this market.
Take a listen…..
The Dublin office market has shown significant signs of improvement and given the large quantity of reserved space the second half of the year looks very positive.
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