INSIGHTS
Market Insights – In Conversation with Aaron Patton, Head of Client Engagement
Aaron shares some market insights on the challenges currently facing both landlords and tenants in the Irish office market. His insights provide helpful context for anyone navigating leasing decisions or planning their next move.
What are the most common needs or priorities you’re hearing from tenants in Dublin when it comes to office space?
“Location is still the biggest factor I hear from tenants. It’s possible to make changes and adapt a space but it’s a lot harder to change the infrastructure around your office; so tenants are very particular about being in close proximity to other amenities. From access to public transport to the simple things like colleagues being able to go out from the office for a pint on a Thursday night!”
“One of the other desirable attributes tenants are looking at when assessing office space is the quality of end-of-trip facilities. This includes things like secure bike parking, showers, changing rooms, lockers, drying rooms etc. These improves the experience of coming into the office for those actively commuting, i.e. cycling.
Sustainability is now more of an expectation than a luxury for most tenants.
Additionally, we’re still seeing demand for fully fitted space in view of keeping CAPEX costs down for tenants. We’ve recently worked with a few clients to reconfigure fully fitted spaces to suit their needs.”
How are companies approaching hybrid or flexible work, and what are they asking for in their offices to support it?
“Post-pandemic the conversation was “we still haven’t really worked out what hybrid working means for us yet or what our hybrid-model will look like”, however I rarely hear this nowadays.
In an ever-changing world with a lot of uncertainty, companies are finding it more difficult to look ahead. This makes forecasting their space requirements challenging and they are therefore less willing to commit to long-term leases. This is a key driver for fully fitted space and short-term leases in the market.”
Are tenants talking more about employee experience, wellbeing, or sustainability these days, or is it still location and cost that dominate?
“As mentioned earlier, I think a lot of these things such as sustainability have moved on now and are expectations rather than nice-to-haves, particularly amongst many of the global companies we speak with, but location and cost are still very dominant.
A lot is ultimately dependent on the type of business you deal with, for a smaller business, they may genuinely not be able to afford the price tag that comes with the Grade A buildings in Dublin, or ones which offer the best end-of-trip facilities etc. So, a lot still does come down to the affordability and business case for many tenants, it’s got to make financial sense.”
What factors are most influencing tenants’ decisions to relocate or upgrade their office space?
“If I think of the reasons why we’re typically invited in by a company or have been engaged by one of our clients, a lot of it is either around growth or for HR reasons like trying to attract and retain the best talent.
Quite a lot of the projects we’ve delivered recently have been driven by growth and clients have needed to take space and deliver fitouts fast to facilitate this growth, which obviously is where our methodology fits in perfectly for clients.
Another driver for change we see is to create a workplace that reflect clients’ brand and position in their market that provides an improved client experience. This is often achieved in part by relocating to a high-quality, well-located space, that is fitted out to their unique requirements.
Other factors I come across from time to time are tenants in buildings that are reaching end of life that need to be retrofitted to bring them up to standard, which often leads to a relocation. Or one office I visited recently was in an area that had deteriorated, and their people were scared to come into the office for safety reasons.”
From what agents are telling us, what could landlords or developers be doing differently to meet tenant expectations right now?
“A lot of the messaging is around the need to invest in their spaces and fully fit floors. It gives the space a competitive edge over others in the area, attracts more interest, and ultimately speeds up the process of renting the space. There is a bit more risk and initial investment for the landlord of course, but there are many case studies that prove the model works and the fitout can typically be rentalised back over the duration of the lease.”
Are there specific gaps in the market where tenants feel their needs aren’t being met—spaces, amenities, or services that are missing?
“Nothing of note. The main concern is the lack of new developments of high-quality stock in the market, which may lead to a shortage of supply in the market in the locations that tenants are desiring.
This ultimately could lead to challenges for tenants down the line if they expand and need more space or are wanting to relocate but can’t due to a lack of supply. It will also likely push rents up which could lead to affordability issues.”
Connect with Aaron.
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