Andy Brainin, Director at South Hill Capital, gives his perspective on the evolving property market in Dublin.
Dublin’s current commercial property supply is failing to entice medium and small businesses to the city’s business districts. While the quantity of good quality secondary stock is increasing, as previously neglected buildings are renovated, the challenge that landlords face is convincing businesses to move at a time when key decision makers are justifiably cautious. The result is that landlords need to be smarter in how they make their office space appeal to potential occupiers and demonstrate the value of their space relative to other options.
Tenant requirements, in fairness to many landlords, is not an easy thing to decipher. While large companies such as Google have very clearly articulated preferences concerning the type of space they want their staff to work in, SMEs are often unable to replicate this. Clearly then, it is impossible to expect landlords to please every business that walks through the door. However, by defining the benefits of their space, they can work to captivate the interest and loyalty of tenants.
Refurbished Georgian townhouses, for example, have the ability to offer a level of charm that new waterfront office blocks can never achieve but this is of no use unless the building has the infrastructure in place to meet today’s business needs. That means high speed broadband, the right level of audio visual support, efficient cooling and heating systems and the willingness to be flexible with the space that is on offer.
Those marketing commercial space to smaller businesses need to appeal to their primary needs. By focusing on factors such as the quality of a workspace, they’re able to offer more to tenants, providing value beyond favourable rental prices. Through this approach, property owners are more accurately addressing tenant needs. The majority of established small and medium sized companies are less concerned about the physical adaptability of their workplace and the need for spaces for downtime. For property owners to appeal to this market they need to consider that these companies’ financial decisions are often based on necessity rather than refinement. Value is the overriding factor.
It seems likely that, for landlords looking to ensure longstanding tenancies in secondary property, the increasingly important factor is providing value to tenants beyond rental prices. Property owners are responsible for creating office spaces that ensure the most suitable work environments are provided to meet tenants’ current and, most importantly, future needs, thereby offering businesses the best value. Property owners and developers who ignore the need to address the mentality of small business owners will find themselves losing out in the race to secure tenancies from the businesses that are relocating to central areas.