Dublin developer IPUT Real Estate’s latest office leasing has all the right ingredients to go viral.
This week the company confirmed that TikTok, the Chinese social media giant on its way to having 2bn users globally, has taken the entirety of its new six-storey, 85,000 sq ft Tropical Fruit Warehouse building in Dublin’s south docklands (pictured).
For Niall Gaffney, IPUT’s chief executive, the transaction marks the end to a busy summer. The company has leased 1m sq ft of office and logistics space so far this year, he says, equalling some €24m (£20m) in rent. No small feat in a market as uncertain as that of 2022. “This is a big achievement for us with the backdrop that we have and the recessionary winds that are blowing against us,” Gaffney tells EG.
City buzz
The Tropical Fruit Warehouse is – no prizes for guessing – a restoration of a 19th century warehouse. Its eye-catching design includes two ‘floating’ office floors with views over the River Liffey, and IPUT spent some €300,000 on public art around the site, including bespoke gates onto the river.
Gaffney hopes the scheme offers “that stimulation that people are looking for coming into the city” as Dublin picks itself up following the Covid-19 pandemic. “That part of the docklands has got residential, it’s got pubs, it’s got theatres, it’s got restaurants,” he says. “It’s got that city buzz, which is probably emblematic of why these companies came to Dublin in the first place.”
By “these companies”, Gaffney means a growing, impressive list of corporate occupiers taking space across IPUT’s €3.26bn, 5.2m sq ft portfolio. Earlier this year the company reached practical completion on One Wilton Park, prelet to LinkedIn, which has also taken other buildings at the scheme.
The company is also rethinking space for existing tenants – a redevelopment of law firm A&L Goodbody’s headquarters is set to begin at North Wall Quay, marking the developer’s first net zero building.
Savills pointed in a recent report to a “resilience and resurgence in the growth of office-based employment” as providing “strong optimism”. Take-up over the first half of this year, at 946,000 sq ft, is below the five-year average pre-pandemic, but marks a robust bounce-back from the Covid-driven lows of a year earlier.
“The Dublin office market has had a question mark hanging over it for the past two years with the pandemic,” Gaffney says. “What we’re seeing is a rebound in occupancy – Tuesday to Thursday occupancy is being established – a lot of tourists in the city, students coming back. The city has a certain buzz about it because of its scale. You can see people out most nights, the city has life to it.”
Flexible approach
As in other big cities, Gaffney has noted a two-tier office market emerging as companies encourage workers back to their traditional desks. Better, more sustainable buildings are letting quickly, he says. Those that miss the mark in terms of metrics for environmental, social and governance issues are struggling.
As for talk of companies leaving the central business district behind? Gaffney doesn’t see it. “The suburban office market is very flat,” he says. “I think the city is where people want to be. If they’re going to come back to work, it’s going to be in the city. This idea of a hub-and-spoke way of working, I don’t think Dublin’s big enough for that.”
That’s not to discount the appeal for some occupiers of taking a more flexible approach to space. This year IPUT launched Making It Work, its own flexible office business. Strava, a digital platform for athletes, signed up as the first tenant and has since been joined by Datadog, a security business working with cloud applications. IPUT has added new locations, and Gaffney says the Making It Work portfolio could grow to about 150,000 sq ft across six sites.
“We see Making It Work as a means of onboarding new occupiers that are looking to grow,” he says. “In the current environment, where there’s uncertainty around the future of the office, uncertainty around the economy, this offering allows you to take a three-month lease or a three-year lease, and we provide all the services… and ultimately, when occupiers graduate from that kind of space to something more permanent, we’d like to be able to provide that across the portfolio.”
They’ll need to move quickly – IPUT is already lining up prelets at upcoming schemes, including an office development at George’s Quay. Gaffney knows the long-running debate over the future of the office is not yet over. But he has time and trust.
“It’s still quite a misty outlook for where offices are going to settle,” he says. “But we have a conviction in offices as a long-term investor. We see the workplace as being central to the economy and central to how we function as a society. And we see the office and the more experiential placemaking initiatives around offices and neighbourhoods in cities as being critical to our future – and to the future of Dublin.”
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