For more than three and a half years now, shutters have been down over an empty strip of buildings on South Richmond Street in the south inner-city.
On a recent Friday, one set were covered in white graffiti, while red writing was scrawled on another.
The shop spaces here once housed the Spiceland supermarket, Aussie BBQ, and Portobello Pizza, and behind them the Raw Gym. Around the corner, on Harcourt Road, there was an Abrakebabra, the Birdcage Bakery, and more.
But those businesses have long since closed.
In 2019, Slievecourt DAC was granted planning permission for a nine-story office block, with retail on the ground floor, on the site that stretches over 0.54 hectares. But that hasn’t yet been built.
Part of the site the company got planning permission to build on, which is lying vacant, is a Dublin City Council-owned plot that councillors agreed that same year to sell to another company, called Charledev DAC.
Both companies are linked to the Clancourt Property Investments, according to company records. Clancourt didn’t respond before publication to queries as to why they didn’t build the development they got permission for in 2019.
Meanwhile, demand for offices appears to have dropped and vacancy in office buildings has increased, according to some industry reports.
“You can’t ignore the fact that there are quite a few big-ticket office buildings that are not occupied or that leases haven’t been taken up on,” says Joseph Kilroy, head of Ireland policy and public affairs at the Chartered Institute of Building.
And, in recent weeks, big tech companies – which are major tenants in Dublin’s commercial real estate market – including Meta, Amazon, Google, Stripe, Twitter, Intercom and others have announced layoffs.
What’s Been Happening?
In the years since it got planning permission for the site, Slievecourt has applied to adjust the planning permission a couple of times.
In August 2022, Slievecourt got a new permission for a 10-storey commercial development on the site, which is bounded by South Richmond Street to the west, Harcourt Road to the north, and Charlemont Street to the east.
Posters on Charlemont Street show drawings of the planned landmark office development called Harcourt Place.
The building is made of glass and white blocks and has a metallic gold feature on one corner. It has large entrances and the picture shows a covered walkway with outdoor seating for a restaurant. The advert also says that the owners will commission a public artwork for the development.
There are other high-rise office developments on neighbouring sites.
Since the pandemic, vacancy in office buildings in Dublin has increased.
In 2018 and 2019, it sat around 5 to 7 percent of space. But for 2021 and the first half of 2022. it was around 10 percent, according to the Dublin Office Market Overview report by Knight Frank Research.
“It’s quite difficult to get a really good sense of what is happening with commercial vacancy at the moment,” says Kilroy, who recently started researching the issue.
A lot of the media articles about commercial vacancy are written by estate agents “who have skin in the game”, he says.
The data suggests a slowdown, he says, and there are reports that some new high-profile buildings in the city have not been filled.
Big tech companies had agreed leases for large new commercial buildings and have since pulled out or reduced the number of offices they plan to lease there, he says.
Among them, LinkedIn has scaled back its plans to expand its office space at Wilton Park, he says. The Sunday Times reported in July that Meta, which owns Facebook, had stalled its plans to fit out its new headquarters.
Technology companies use 45 percent of the office space in Dublin, according to the Knight Frank report.
Demand from that sector looks likely to decline, since some big tech companies are letting workers go and some of them also allow their staff to work from home.
According to industry sources the demand for new-build offices is still high, though, says Kilroy, but “older, less swish buildings are apparently really exposed here”.
The Knight Frank report says that “Demand for new, sustainably certified space, particularly in core city locations, is leading activity.”
Building in Adaptability?
Kilroy says he thinks policy makers should be looking at the possibility of introducing requirements that new buildings are designed with adaptability in mind.
In the UK authorities introduced “permitted development rights” , he says, which allowed owners to change the use of a building from commercial to residential without seeking planning permission.
“It’s been good in the sense of increasing supply,” he says. However there were issues with quality and fire safety in some of the buildings.
So the trick is to design the building with adaptability in mind, says Kilroy. That could save a lot of waste if the demand for offices declines, and the buildings could easily be adapted for housing.
Given the rate of construction we are seeing at the moment, particularly in the commercial sector, policy makers should consider adaptability, he says.