Long-term investors have already decided on the future of the office

Iput CEO says prime offices will continue to appreciate in value in post-pandemic era

The chief executive of Iput, Niall Gaffney, has said the move by a number of long-term investors to acquire offices in Dublin and other international cities in the face of Covid-19 "answers the question" about the future of the office as a workplace.

Speaking to The Irish Times following the recent publication of his company’s 2020 results, Mr Gaffney dismissed speculation surrounding the survival of the office model in the post-pandemic era, saying: “People talk about the long term. Most of it is BS. It’s not really long term. Long-term investors look through 10-year and 20-year cycles. What I admire about the German investors that we deal with, and we’ve seen them active in the city, they’ve taken the opportunity to buy office investments in Dublin against this backdrop.

“They see this pandemic and they see it settling down, and that we come through it. And as a long-term owner, that’s what we’re trying to do as well [at Iput].”


Pointing to the recent acquisitions of Fitzwilliam 28 and Baggot Plaza by the French real estate investor Amundi and German fund Deka Immobilien, he said: "They are continuing to invest at yields of 4 per cent because they understand the nature of cycles. And I think they'll be proven to be right. With the low interest rate environment likely to continue to prevail, real assets are going to continue to appreciate in value. And those assets that produce quality income are going to appreciate the most."


And while rents would see “variations” in response to Covid-19 and other crises, they would he said, continue to be paid where offices are located in “a quality city with a quality building with a quality product that attracts people to occupy”.

That certainly appears to have been the case for Iput’s Dublin office portfolio in 2020. According to its results, the company collected 97 per cent of rent due last year despite the Covid crisis, resulting in a cash dividend of €102.5 million for shareholders. The fund said its portfolio was worth €2.9 billion at year-end with 97 per cent occupancy.

Looking to the future, Iput said that with 84 per cent of its current development pipeline pre-let, it expects to increase its 2020 year-end contracted rental of €122 million to €160 million over the next three years. Contributing to that anticipated growth in revenues will be LinkedIn, whose European headquarter campus Iput is currently developing at Wilton Park in Dublin 2.

Mr Gaffney said he expects to see a “renaissance” of the office in the wake of Covid-19 as opposed to a more permanent migration to working from home, or other forms of remote working.

“All the surveys in the initial stages of the pandemic were that people loved being at home, recreating themselves and their families and their neighbourhoods. Now it’s turned into a grind. It’s depreciated people’s ability to be creative and to be stimulated. We can miss human interaction and cultural stimulation. I think that’s what cities give you and that’s what workplaces give you.


“On one level, everybody’s got a bias. And we [IPUT] would say that, wouldn’t we? In the same way that certain commentators might say ‘well, offices are dead and they’re all going to be converted to residential’. They have a certain bias. I think somewhere in the middle is right.”

Mr Gaffney acknowledged that Dublin and other cities, as they are constituted currently, need to change to make them more attractive for the people who live and work in them.

He said: “Go to certain parts of the city on a Friday evening at 7pm and right up until Sunday evening or Monday morning and they’re dead. Dead frontages with no urban grain. There’s nothing to bring you back in whether it’s apartments, bakeries, cultural institutions or public art. That complacency, the way we treat cities, has left them hollowed out.

“That’s a design flaw in what’s been developed. It’s poor and lazy design. It’s planners’ policy, taking what they have been given by architects and developers, who are naturally profit-driven. We need to go back with city planners, major employers and the owners of real estate to reinvent and reimagine those spaces so they become vibrant.”

Ronald Quinlan

Ronald Quinlan

Ronald Quinlan is Property Editor of The Irish Times