Anticipation of a hard brexit turns UK’s loss into Dublin’s gain
Fear of a hard brexit triggers demand for commercial property in Dublin
Dublin is counting on a hard brexit for more property-driven business as it would force many corporations to relocate. Businesses are anxious as to the outcome of UK-EU negotiations and planning in advance in case an unfavourable brexit outcomes stares at them.
Big names such as JP Morgan, Bank of America Merrill Lynch and Barclays Bank are already on the move which is indicative of the fact that more is coming, which is only good news as far as the property sector of Dublin is concerned. It is already showing up in the property segment of Dublin which is witnessing a surge in demand for commercial and office space.
According to the chief executive of Hibernia Reit, Kevin Nowlan, Dublin could benefit from a second wave of brexit related relocations. He said that this second phase of relocation could take place if it becomes clear that the UK’s negotiations with the EU for an acceptable exit have failed. He said that UK-based businesses will shift to other locations within the EU if they think brexit is going to have a long-term impact on their business. Nowlan said that the fact that a large number of space in the city is being taken up by fintech companies explains the phenomenon. Real estate space in Dublin is being bought by businesses now in the anticipation that it will be more difficult and expensive to do so after a year as the second wave of relocations by UK-based companies take place.
Another factor in concern regarding the real estate is stamp duty. The stamp duty has been raised by the government from 2 per cent to 6 per cent but that was done in order to attract international capital into the country. Nowlan said that the 2 per cent stamp duty was not according to international standards which is 5 to 6 per cent for commercial property. He said, although, the industry is surprised by this raise, it was coming at some stage. He said that the raise may have annoyed those who have bought property in the past few months but those who bought property three or four years back have not been impacted by the raise.