1,000 public sector jobs have been created as a direct result of Brexit, according to a new report from property advisor, Savills Ireland.
The report finds that public administration has been by far the fastest-growing sector of employment in Dublin over the last year. In part, this has been driven by Brexit with 1,000 new public jobs created as a direct result of the need to prepare for Britain’s withdrawal from the EU. These roles have been created in Revenue, customs controls, passport services, regulation, and accreditation, and have not just been restricted to Dublin.
According to Dr. John McCartney, Director of Research at Savills, this is feeding through to demand for business space with each office workstation takeing up about 10.3 sq m, so inevitably this is feeding into the demand for business space and has contributed to the sharp increase in the public sector’s share of lettings.
Public sector bodies accounted for 27% of all the office space leased in Dublin over the first-half of this year – the highest proportion in a decade. On average, over the last decade, the public sector has accounted for just 10.7% of take-up.
Government Departments and State Agencies with Brexit related posts that have been taking office space in Dublin include IDA Ireland, the HSE, and the Revenue Commissioners (who also took space in Rosslare).
However, while Brexit has had some positive impacts on office demand, Savills’ report notes that it is hard to quantify the offsetting negatives arising from greater uncertainty. Moreover, the report says that Brexit in any form is likely to be a net negative for the Irish economy and to result in less business space being required than would have otherwise been the case.
Elsewhere, Savills notes that office supply has been very well contained in the current cycle, with only around 150,000 sq m of new space set to be completed this year. This compares with figures approaching 300,000 sq m back in 2007. And when demolitions are taken into account, net additions to the city’s office stock are likely to be a modest 100,000 sq m.
Looking further ahead Andrew Cunningham, Director and Head of Offices at Savills Ireland said there have recently been suggestions that office construction has peaked. However, based on Savills’ detailed scheme-by-scheme analysis of the development pipeline, they disagree with this view. “Based on activity that is already onsite, we expect significantly more space to be delivered next year than was the case in 2019. While this is likely to result in some uptick in vacancy rates during 2020, rents appear to be well underpinned for the foreseeable future.”
Read the full report HERE