Despite cutbacks, the technology sector is still the top choice for the Dublin office market, according to the Savills report

Tech remains the top choice for finding tenants for Ireland’s prime offices, despite a global spate of high-profile job cuts and spending cuts sweeping through the sector, according to property brokers Savills’ latest Dublin office market review.

Cash rents for prime offices are now back at Celtic Tiger levels, the report said.

Even accounting for recent job losses, employment in the sector at large, well-funded, global companies like Meta and Google, which have major Dublin operations, has grown by 50 percent over the past decade, according to the report.

Despite recent job losses and a shift toward more remote work, office attendance is still increasing, particularly Tuesday through Thursday, the report said.

“It is arguably more difficult to select a sector other than technology that an office market should target over the long term, given the long-term evolution of the technology sector’s market capitalization relative to other sectors,” according to the report by Savills’ research director, John Ring.

He sees the so-called “tech wreck” as relatively short-lived, as the rise of artificial intelligence, wearable technology, medtech, fintech and robotics is cited as evidence that the sector can adapt and renew its growth faster than others.

Meanwhile, more traditional occupiers are likely to come to the fore, a trend already seen in last year’s biggest office deal — a deal for a new Citi Group headquarters.

However, while rents are back at Celtic Tiger levels and tech companies are poised for further growth, real incomes for real estate investors have fallen.

“The prime rent level is now €62.50 per square meter, which corresponds to the previous high of 2007. Adjusted for inflation to reflect real rental levels – which matters – however, rents are 14 percent lower, or the equivalent of €53.50 per square foot (in 2007 terms).”

The cost of producing prime office space has increased by 45 percent over the same period, and higher construction costs as a result of implementing ESG standards will also contribute to this momentum, he said.

Green building standards are driving up costs, but are also likely to boost demand, including from the government sector, where departments and agencies have been given a target of reducing their carbon emissions by 50 percent by 2030. This likely means they will need to rent, buy or renovate new homes, green offices, the report said.