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Old January 21st, 2016, 01:03 PM   #1
Dublin84
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Huge amounts of commercial, very little residential

So there is a massive amount of commercial currently being built or construction will commence shortly. The only accommodation being built in any sort of number, appears to be student accommodation. Where are all the workers who are going to occupy these offices going to live or is there going to be a large oversupply of commercial property?
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Old January 21st, 2016, 06:59 PM   #2
Jimble
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Originally Posted by Dublin84 View Post
So there is a massive amount of commercial currently being built or construction will commence shortly. The only accommodation being built in any sort of number, appears to be student accommodation. Where are all the workers who are going to occupy these offices going to live or is there going to be a large oversupply of commercial property?
There's huge demand for commercial property going back as far as the middle of 2013 because the commercial property market was less bubbly than the residential market during the boom (i.e it was based more on real demand and was less smoke and mirrors). The residential market is still depressed because mortgage lending rates are still depressed. The central bank's rules are harsh and younger people are far less likely to buy houses nowadays so the first-time-buyer concept which drove the housing bubble is pretty much dead. There's also a very obvious rental phenomenon that's happening that could signal a permanent change in the housing market or could be a blip which is fuelling anxieties. So even though house prices are rising, the type of houses being sold aren't 1 & 2 bed city centre apartments, they're suburban houses and higher end apartments. It's not that there's no demand it's just that there's very obviously more money and less risky money to be made in commercial property in the city centre.
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Old January 23rd, 2016, 02:56 AM   #3
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Central Bank rules are sensible...not like when 'young people' were lashing out €300k on one bed tips in Dublin.
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Old January 25th, 2016, 03:01 PM   #4
nitrobyname
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Central Bank rules are sensible...not like when 'young people' were lashing out €300k on one bed tips in Dublin.
Yeah everyone seems to be complaining about the stricter mortgage lending rates, but it is sensible, for once. Goes both ways really, banks during the boom were just throwing money at people, just as alot of people were willing to take it. If you can't afford to buy, then don't.
Only thing though, a key factor to the current housing crisis comes from the fact that our renting system is so bad. If that was regulated better, and people actually had a sense of rent security then we wouldn't be in this mess right now.
Catch 22 at the moment, cant afford to rent, cant afford to buy.
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Old January 25th, 2016, 06:58 PM   #5
PeteC
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I seriously doubt the demand exists for the amount of commercial space proposed in Dublin. The truth is that there is demand due to no new supply for several years and everyone has jumped on the bandwagon and we will most likely see an over supply. The developers are happy to build shell and core office blocks because they don’t have to worry about fit out and leases are typically 5 – 10 years. There is no market to sell apartments (and probably never will be again) and rental apartments have to be finished and furnished which has extra costs and require a lot of management due to turnover of tenants, maintenance, etc. Also, developing apartments has become very expensive due size regulations and the cost of the BC(A)R legislation. Most developers are not interested in the long term return, they want a quick buck and office space is where that is at.

Kennedy Wilson and TIO, and some of the REITs to an extent, are happy to develop a couple of hundred apartments and manage them because they can get working capital from investors. Some of the other developments are from receivers who want to get planning permission and sell it on. I wouldn’t be surprised if nothing happens with some of receiver proposed projects, by the time they get sold, funding secured, contractor appointed, they could have missed the boat. I can see there being much reduced demand for office space in 12 – 18 months time when projects like No. 1 Ballsbridge, the Exchange Building, Central Park and Burlington House have been let plus the likes of Capital Dock, Bolands Quay, Project Wave and the Molesworth Street projects well on. Bear in mind that Google, Facebook, Twitter, Airbnb, Microsoft, and Linkedin will all be well settled in their digs so it is hard to see who will be there to take all these huge floor plates.

Unfortunately NAMA has also jumped on the other bandwagon at the minute, student accommodation. There is big demand for student accommodation because students are being squeezed out due to competition in the rental market. The market has responded and there are a large number of student beds being developed presently. NAMAs 1,000 student beds at the Point is too concentrated, is not a great location for students and not great for the area. If NAMA wanted to do something useful and progressive and provide something the market wont, rather than more of what the market will provide, they should develop 3 bed family friendly apartments at the Point Village and introduce new longer term or rolling leases. It would really benefit the docklands long term if young families were to settle there. They should also revert back to the Watchtower and stop this Exo nonsense at once.
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