While leasing activity remains strong for prime offices in Dublin city centre and prime suburban offices close to transport links, leasing in other areas with less quality stock is proving more challenging.
As such, smart landlords in these markets are actively targeting occupiers seeking to reposition offices for alternative uses. The industry is rife with discussions surrounding the conversion of offices to residential - but in reality, we are seeing an increase in deals and interest for alternative uses such as medical service, educational, creche, life science, cultural use, and embassy.
Historically, landlords have been reluctant to entertain lettings to these occupiers due to the risk and delays associated with the planning process. However, as demand for office space has changed due to new working patterns and the increased focus on ESG credentials, they have found that alternative use tenants are willing to offer longer lease terms and often stronger deals than traditional office tenants in certain locations and buildings. This has therefore led to an increase in activity and in the last 12 months the Savills office team has been involved in office deals involving the conversion of office floors to creches, music schools, medical care facilities and numerous embassies. We have also seen significant alternative use deals such as the APC pre-letting 60,000 sq ft in Cherrywood for a medicine accelerator campus, and an educational firm is currently in legals on 29,000 sqft in Dublin 1.
A location that has very successfully targeted alternative use is Carrickmines Park, Dublin 18 which has become a hub for medical occupiers. This clustering initially began in 2019 when VHI purchased the Hampstead Building and converted the 58,000 sqft office building to their new 360 Health Centre. Since then, other medical firms such as Optilase, AllView Healthcare, and Thearpie Fertility have successfully opened in Carrickmines Park.
Smart landlords in these markets are actively targeting occupiers seeking to reposition offices for alternative uses.
Conor Egan, Associate, Office Agency
Carrickmines Park has many of the criteria alternative use firms seek when exploring office opportunities; it is surrounded by a large residential population; has strong transport links with Luas stations beside the Park, bus stations in the Park and quick access to the M50; offers large availability of car parking and has a wide range of amenities for staff such as showers, bike parking and retail and restaurant offerings. The office floorplates in the Park of 1,000-2,500 sqft and larger floors of 7,000 -8,500 sqft mean the Park can provide solutions for smaller medical firms such as GPs and dentists, as well as large private clinics.
Given this successful track record, we expect there to be more alternative use lettings for locations such as the Carrickmines Park where landlords are willing to work with these firms.
Contact Savills Conor Egan to discuss change of use office opportunities today.
