Technology firms were once again the most active sector in Dublin's office market in 2020, the latest "Office Market in Minutes" report from Savills Ireland shows today.
Today's report reveals that Information and communications technology (ICT) accounted for the top ten deals last year and represented 70% of take-up last year.
The report found that although general employment has fallen, the share of office-based employment has stayed relatively steady, which it said bodes well for the future.
Looking at the year as a whole, Savills said that due to Covid-19 nine of the top ten deals in 2020 were transacted in the first quarter of the year, which also accounted for 63% of the take-up this year.
When compared with the sum of second, third and fourth quarters against the same quarters in the past five years, 2020 is 74% lower than the five-year average from 2015 to 2019.
Savills said the largest deal in the fourth quarter of 2020 was Amazon's letting of 6,938 sq. m at Burlington Plaza 2, while the Daa's 4,100 sq m leasing of Three Airport Central was the second largest deal of the quarter.
Meanwhile, the failure of the final Brexit deal for financial services were also found to offer some opportunity to the Dublin office market.
It noted that firms that had to date only made a foothold presence in Dublin were now making moves to scale up their operations.
Andrew Cunningham, Director of Offices at Savills Ireland, said that while the company has always been conservative concerning the level of occupier relocations arising from Brexit, he said we are likely to see an increase in transitions to Dublin.
"Many in coworking locations, such as WeWork, having awaited the result of the Brexit negotiations, are looking to increase their Dublin presence over the coming quarters. Some big names in the new generation of tech and fintech are also now landing," Mr Cunningham said.
Experts at Savills also said they are confident that a shift to a hybrid model of working dynamics, where workers do some of their work from home, will not necessarily translate into a significant office footprint reduction.
They said that once firms allow for surge capacity for the "popular days", office space will be adapted to facilitate lower density, collaborative workspaces in the office.
"The post-Christmas lockdown has certainly been a greater challenge than the previous lockdowns and anecdotally, many companies tell us that teams and people are strained and the mood is swinging towards optionality and choice to work from the home and the office so they can meet colleagues, collaborate and socialise," Mr Cunningham said.
"The upsides of remote working were immediate, but the downsides have been slower to manifest, with impact from a lack of mentoring (including learning on the job) and constraints on virtual onboarding of new staff now becoming more apparent," he said.
Mr Cunningham said that even within the tech sector, where firms have possibly the greatest ability to facilitate distributed workforces, Savills has not seen changes to fit-out plans and applications for consent from large tech occupiers indicating that firms intended to stall plans for parts of their new on-site buildings.
Looking ahead, Savills predict that take-up of office space will be reduced in the first half of the year but emerging new demand and reserved tallies will start to rise as many occupiers maintain their wait-and-see approach in the face of uncertainties around the final trajectory of the virus.
"Once vaccinations reach meaningful levels, Savills expect execution of deals into contracted take-up to scale up," it added.