Recent figures have shown a large proportion of Cork commercial property has been left vacant, with the proportion of commercial properties unused likely to increase even further in 2023. This trend, known as ‘grey space’, is defined as spare office accommodation that remains dormant despite being leased and is mainly attributed to job losses, working from home and global uncertainty. This article will explore what this means for Cork businesses and how it could affect the local economy.
The main concern to come out of this surge in grey space is how it will affect the local Cork economy. With the demand for office spaces decreasing, there are fears that rents could see a dramatic decrease in the coming months. The decrease in rent prices may benefit some businesses which would be able to take advantage of lower rates; however, smaller business owners may struggle to find tenants willing to pay a higher rate.
On top of this, many businesses are now looking into subletting their surplus office space as they no longer need them. This could lead to an oversupply of office space on the market, making it difficult for businesses who are still looking for premises due to competition from other landlords offering cheaper rates. Furthermore, this oversupply could cause a ripple effect around other sectors in Cork such as construction workers and those employed by estate agents and surveyors who may lose work due to lack of demand for new building projects or surveys on existing buildings.
The pandemic hit Ireland’s tech sector hard last year with many companies having to make job cuts and restructure their operations which has had an inevitable knock-on effect on the commercial property market. As more people switch to remote working practices, there is less need for offices which has caused many businesses across Ireland – not just Cork – to rethink their strategies when it comes to using physical workspace.