In recent years, Dublin's flexible office market has grown steadily, offering a supplement to the city's well-established and prosperous conventional office sector and 2022 saw more than 100,000 sqft of new flexible office buildings open. We spoke to Workthere Ireland’s lead broker, Kim Hogan, to discuss Dublin’s flexible off market and what the future of the sector looks like.
A notable new operator that has entered the market in recent years is Grafter, who have opened four locations with a fifth expected to open before the end of the year, further demonstrating Dublin's power to draw new types of operators and spaces. Grafter joins an already established market of flex operators such as Iconic Offices, Glandore, IWG, Pembroke Hall and WeWork.
Operators continue to grow their footprint, with Glandore announcing in Q4 2022 their newest location, Bottleworks expected to open for occupation this summer. The building spans 26,672 sqft across 5 floors and is a Nearly Zero Energy Building (NZEB). With ESG becoming an important part of many companies office footprint, Bottleworks is an excellent example of a flexible office provider adding to their portfolio with sustainability top of the agenda.
Average desk rates in Dublin have increased by €200 since 2019. Average pricing saw a dip in 2021 in line with the pandemic, but this quickly bounced back and rose to €700 in 2022 and is currently sitting at €800 this year. The increase in desk pricing directly correlates to the rising demand for flexible office solutions which we are seeing in the Irish market across businesses from a variety of industries.
Historically flexible offices were viewed as touch down space for companies arriving in Ireland, however, more recently it has become a key part of a company’s global real estate strategies. We’re seeing demand across the board from large scale corporates taking huge portions of flex space, and startups looking to capitalise on the network of potential clients they can connect with in a flex building, to companies looking for short term accommodation for project or swing space.
As 2023 progresses, the priority for many companies is to attract workers back to the office. Flexible office providers are helping with this return to the office movement by offering community events and networking opportunities, attractive workspaces and some are providing members with complimentary breakfast offerings – all of these are included in the monthly fee, an attractive feature when considering taking flexible office space. With an expected 200,000 sqft+ of new flexible office space expected to open this year across modern and period buildings, taking a flexible office provides an ideal solution for occupiers may be unsure of their long-term requirements and who are looking for an attractive office space to encourage their employees to come back into the office.
The market will remain divided through 2023 as a result of occupiers' flight to quality, with the highest-quality spaces in the finest buildings in the best locations outperforming other properties and pushing up prices for this stock. While there is undoubtedly still a demand for budget space, there is a greater supply of space available at this end of the market because there is still a sizable amount of legacy stock in this area that needs to be upgraded.
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