Facebook’s decision not to go ahead and occupy a huge tract of new office space at the former AIB headquarters in Ballsbridge will ruffle more than a few feathers.
ts parent company Meta has already announced that 11,000 jobs will be cut worldwide. Around 350 redundancies are expected here as part of the previously announced job cuts.
It has now emerged that the tech giant, which employs over 4,000 people in Ireland, will not move into a massive 375,000 square foot office space being developed by Johnny Ronan.
Zuckerberg is now trying to sublet the offices that Meta signed up for in 2018
However, back in 2018, Meta signed a 25-year lease for the buildings – making it a very valuable property.
The building is currently being sold for an estimated €595 million.
Meta is now attempting to sublet that space, although this will not affect the 339,000 square feet that the company already occupies at the rear of the Ballsbridge complex.
The decision not to proceed with the new space says a lot – not only about Meta and his own particular circumstances, but also about the Dublin office market in general.
Why does a company that thought a few years ago they needed 33,000 sqm more office space now decide they don’t?
The news may not come as a huge surprise to people, as Meta has seen its traditionally robust ad revenue shrink and is spending $300 million a week developing its new virtual reality Metaverse technology without reaping much revenue from it.
But hybrid work should also play a role here. More and more large companies are looking to sublet office space as they reconfigure their staffing and office needs.
We may find that the tech giant has no trouble finding tenants for such a prestige building. But it’s still a very significant change of heart, even for a company of this size.
If you’re worried about potential additional job losses in tech, this news will make you sit up and take notice. But even if you’re in the commercial real estate industry, you can have the same reaction.
Pressure mounts on Facebook founder Mark Zuckerberg as he continues to develop his expansive and expensive vision for the Metaverse. The company has already spent $100 billion on the concept, while its share price is down 70 percent from its peak.
Some shareholders are upset that Zuckerberg owns just 13 percent of Meta’s common stock but controls over 50 percent of the voting rights through special preferred stock.
However, there’s not much the disgruntled shareholders can do.
And, moreover, they bought the shares knowing full well that this was the case. They didn’t mind if the stock was on the way up.
A few weeks ago I was driving by the Ballsbridge complex at 8.10am on a Saturday morning – and noticed brisk construction on the cobblestones in the front plaza.
‘Meta is clearly in a hurry to get in there when the builders are going full throttle on a Saturday morning,’ I thought.
It doesn’t seem. It seems the rush was to have it ready for sub-letting.
The central bank should donate the Sandyford site to the state
Thank goodness for the Land Development Agency (LDA). If it weren’t there, the central bank would be free to sell its 37-acre property in Sandyford to the highest bidder.
The property is very valuable and is located in a designated area for residential development. It currently houses the bank’s storage and minting capacity. The central bank plans to move these services to a new location, which it estimates could take around seven years.
The central bank doesn’t need the money, but Dublin needs houses
As the bank falls under LDA legislation, part of the site must be used for social and affordable housing. This will reduce the land’s value to the central bank, but it will ensure that it is put to good use for much-needed housing.
We should consider that the central bank made a profit of 1.2 billion euros last year. It doesn’t need the money. But the capital needs social and affordable housing.
Given the role the central bank played in creating the housing crisis, with its terrible track record of regulating banks during the boom years, it should donate the land free of charge to help build social and affordable housing.
Many factors have contributed to the current housing crisis – including the fact that banks, domestic developers and the state have been broke for almost seven years. This was partly due to excessive bank lending and poor central bank oversight before the 2008 crash.
At least if the LDA legislation is in place it means that this very valuable site will be used to help with housing development.
Inevitably, the central bank will have to foot the hefty bill of building a new cash repository elsewhere. The lower the sale price for the Sandymount property, the smaller the bank’s contribution to the state coffers.
But housing is more important than cash right now. The central bank should find a mechanism to hand over the site to the LDA for €1 in the future.
Get ready for sky-high hotel price gouging
Planning a trip to Ireland next summer? Or maybe some weekend hotel stays? Get ready to pay for it through your nose.
Fáilte Ireland chief executive Paul Kelly has warned of the damage to tourism caused by continued “price hikes”.
Here hotels increase prices, sometimes doubling or tripling prices when there are big events.
Kelly understands the long term damage this can cause as Irish and international visitors alike feel ripped off.
The tourism industry has warned that with so many beds occupied by asylum seekers and refugees, the number of beds available for the next year will be limited.
High demand and low supply lead to price increases. And there’s the point that international visitors spend big locally – boosting long-term job creation and the tourism sector as a whole.
However, hoteliers are paid by the state to accommodate the asylum seekers and refugees. You’re already making a lot of money doing this.
It has been estimated that 24 per cent of hotel accommodation in Dublin and 28 per cent of hotel rooms in the rest of the country is used to house people who are supported by the state.
Some hotels won’t have government-paid customers — so it would be particularly bad if they just raised prices on short notice because they can. This could potentially cause lasting damage to this sector, which is important for the economy.
It took several years for the industry to recover from the price gouging of the boom years. But it bounced back and in the end everyone won.
However, when the managing director of Fáilte Ireland feels the need to write to all hotels and warn them of the damage caused by price increases, you know it’s going to be bad.
https://www.independent.ie/opinion/comment/facebooks-re-think-on-new-dublin-offices-looks-scary-42207711.html Facebook’s rethink of new Dublin offices looks scary