Paul McNeive: ‘Economic power of Dublin Docklands to double by 2021’

There are 40,000 people working in Dublin’s Docklands, and there will be another 40,000 people working there within two years. That’s one dramatic revelation from an expert seminar run by Owen Reilly, estate agents, who specialise in docklands property. I attended the event as an Owen Reilly client, and I was surprised at the pace of development.

Derek Kelly, head of Dublin City Council’s docklands office, provided an overview of the planning and infrastructural issues. The role of his office is to manage and implement the North Lotts and Grand Canal Basin Strategic Development Zone (SDZ) planning schemes.

Their focus is on five development hubs: Grand Canal Square, Boland’s Mill and Britain Quay on the southside, and Spencer Dock and the Point Village, across the river.

The SDZs are split into 20 blocks and provide for 2,600 residential units and 366,000 sq m of commercial space. Mr Kelly said the number of residential units is likely to be exceeded, and the commercial space will definitely be exceeded, partly due to moves to allow increased building heights.

The plans also provide for three new bridges, seven new public spaces and a range of community facilities.

The pace of development is dramatic and there are 15 large projects under construction, with planning permission for five more. The commercial element of this comprises approximately 400,000 sq m, of which 300,000 sq m is under construction. The residential component provides for just over 2,000 apartments, plus student accommodation of over 900 bedspaces. Over 1,000 of these apartments are under construction.

Among the infrastructural works being undertaken are a new district heating system for the docklands, and an ‘Open Access Telecoms Network’, which is ducting to meet future connectivity needs. The next major landholding to be developed will be the Poolbeg West SDZ, comprising 34 hectares (84 acres) and with potential for 3,500 residential units and 100,000 sq m of commercial space

Fuelling this are the rapidly-rising employment numbers in the docklands.

Anne-Louise Hannon, associate director with CBRE, described the strength of the office market. She said there are 14 office developments currently under construction in the docklands, totalling approximately 250,000 sq m, and that approximately 140,000 sq m of this has already been reserved. By the end of 2022, over 350,000 sq m is scheduled to be delivered and this will accommodate a further 40,000 workers in the area. Ms Hannon is positive about the outlook and told me that with Dublin vacancy rates below their natural level, prime rents increased by approximately 5pc last year to €650 per sq m.

For residential property, Maya Healy of Owen Reilly, said apartment prices increased by 4pc last year, a cooling from double-digit growth over previous years; 62pc of buyers are investors, and 75pc of those are Irish.

Average rents grew by 10pc last year, 80pc of tenants are from overseas, and 83pc don’t want a car-parking space. Ms. Healy estimates that landlords are securing gross yields of 5.8 pc.

Average sales prices for apartments are €322,500 (1 bed), €503,000 (2 bed) and €612,000 (3 bed), while average rents are €1,983 per month, €2,386 per month and €3,150 per month respectively.

Interestingly, Owen Reilly data shows that the average total income for a couple renting a 2-bed unit is €145,000. At the prime Grand Canal Dock, the average salary of a single tenant is €117,000 per annum.

Of 11 major developments totalling 2,085 apartments, nine of those are being sold as single lots into the Private Rented Sector for onward leasing. In almost all cases, the 10pc social housing provisions are being provided by developers, elsewhere in Dublin. Afterwards, Owen Reilly told me there will be an under-supply of apartments and that he expects rents to continue rising.