Citigroup talks on Ronan scheme boost nervous office market

Hopes in the aftermath of the Brexit vote that the Republic would lure most of the banking activity that had to move out of London may have been ill-founded as Frankfurt and Paris won the bulk of the high-profile bank moves.

But it didn’t concern office investors and developers in Dublin’s office market, who had enough to be getting on with accommodating ongoing growth in workers in the city as it remained a mecca for US technology giants.

The market was even buttressed during Covid-19 lockdowns as the stocks of technology companies were turbocharged during the pandemic. But with the tech-rich Nasdaq off almost 30 per cent so far this year, seemingly never-ending expansion has turned to cost-cutting.

Twitter and TikTok

We’ve seen Facebook-owner Meta hit the pause button in July on the fit-out of its new Dublin headquarters that builder Johnny Ronan and US-based Fortress Investment Group is developing for the social media giant in Ballsbridge. Last month, Twitter moved to scale back its Dublin office space – even if job cuts are off the table, for now, at least. TikTok has also slimmed down its Irish office needs. More will follow.

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However, news this week that Citigroup – which had established Dublin as its European HQ before Brexit – is close to taking on most of the office space Ronan and Fortress are developing further down the Liffey from the US bank’s Irish base will ease some of the nervousness about Dublin’s office market.

Mixed-use property

Sources have confirmed that the bank’s Citibank Europe unit, which said in April it was adding 300 new jobs to its existing 2,500-strong workforce in the State, has agreed to buy a site on the Waterfront mixed-use property project being developed by Ronan Group Real Estate and Fortress for about €100 million.

Citigroup will have to pay up to a further €200 million to the developers to build the 300,000sq ft of office space it’s close to signing up to, according to the Financial Times. That equates to 70 per cent of the total of 430,000sq ft of offices planned at Waterfront. Citigroup also has an option to take on the remaining space.

Still, there’s no word yet on whether Citigroup has found a buyer for its existing 230,000sq ft European HQ in Dublin’s north docklands, put on the market in March with a price tag of €120 million and pitch by its agents that it could be redeveloped to provide over 475,000sq ft of offices space.