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The reaction to Google’s decision to pull out of a landmark Dublin office deal has been muted.
The commercial property sector has been rocked by news that the US search giant will no longer continue with plans to sign contracts for the Office of Classification building that would accommodate up to 2,000 people. But industry figures said suggestions that it could turn out to be a tipping point were overblown.
And there was little sign that any of the major tech companies were planning to trim their existing footprint despite the uncertainty created by the Covid-19 crisis and the government’s current guidance to work from home whenever possible.
Social media firm Facebook, which is currently building a campus in Ballsbridge on the site of the former AIB Bankcentre, said it remained committed to development and to Ireland.
More than 2,000 people currently residing on the Grand Canal are expected to officially move to the new campus once it is safe to do so.
Working at home
Salesforce is also expected to continue development of the Salesforce Tower in Dublin. The Spencer Dock project, which was reduced by height restrictions in the area, will be able to house 3,500 employees once it is completed, and the social distancing requirements have ended.
“In the context of the pandemic and the current shift towards working from home, it is difficult to predict what decisions companies will make about office space requirements at this time,” said a spokesman for the American Chamber of Commerce in Ireland.
“There will most likely be a lack of clarity until we get to the post-pandemic business environment and companies have a better idea of their future workspace needs.”
Industry figures in the commercial property sector described the position as “disappointing”, but nothing more.
“I don’t pretend there will be 10 other Google’s to fill this space,” said one, “but inevitably there will be other stakeholders who will come forward. They can rent floor by floor rather than the entire building and it may take longer but it will still fill up.
Influences on the decision
There was some annoyance in the industry that Google’s not being more forthcoming on the reasons for its decision had only fueled the uncertainty. It was noted that Google has several other office projects underway, and since the company has already decided to let staff work from home until next year, that may have influenced the decision.
Developers are unlikely to slow down their plans as a result of Google’s call, an industry executive said. He noted that most of the office plans that are being built or will soon start were already reserved at 50-60%.
“This market is not like previous booms where developers built before demand,” he said. “Developers have generally found it difficult to keep up with demand. The supply of very high quality new space is reasonably scarce. “
Sources said that roughly a quarter of the deals that had been in play before the shutdown were now dead in the water and another quarter of them currently on hold. However, the rest have completed or are currently working on the process.
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