By Padraic Halpin
DUBLIN (Reuters) - New office space planned for Dublin over the next five years can accommodate more than 100,000 extra workers and any companies seeking to relocate as a result of Britain's vote to leave the European Union, property group Savills (L:SVS) said on Thursday.
Ireland has called the prospect of Brexit the greatest economic and social challenge it has faced in 50 years, so the potential to attract businesses from Britain could help to offset some of the damage.
Already the European home for the likes of Facebook (O:FB), Google (O:GOOGL) and Microsoft (O:MSFT), Dublin is competing with other major European Union cities to attract companies seeking to relocate as a result of Brexit.
Government officials have also sought to assure companies that commercial development has recovered from a property crash that wrecked the sector in 2008.
Construction in Dublin ground to a halt from 2010 to 2014, but now almost 150 new office blocks are either under construction, have received planning permission or are in the planning stages, Savills' survey found. More than 12 million square feet (1.1 million square metres) of office space is planned for Dublin.
"Companies have begun to seriously develop strategies to deal with Brexit. As Dublin's pipeline is increasing, it is likely the market will be able to cater comfortably for any pick-up in demand that may result," Savills said.
But the surge in commercial development is in stark contrast to a shortage of housing that could hurt the prospects for investment from companies seeking to relocate staff to Ireland.
A survey on Tuesday showed residential rents, already at record highs, are rising at the fastest pace in over a decade.
The Savills' survey showed that unlike the credit-fuelled property crash, most of the commercial development is being funded by Real Estate Investment Trusts, such as Green REIT (I:GN1) and Hibernia REIT (I:HBRN), foreign funds with large balance sheets or private equity firms.
Ireland's National Asset Management Agency (NAMA), the state-run "bad bank" set up in 2009 to rid banks of troubled property loans, is funding nine percent of all schemes in full and another five percent through joint ventures.
"We have most definitely seen in the last six to eight weeks a significant uptick in the quantum of (Brexit) inquiries," Kevin Nowlan, chief executive of Hibernia REIT, told Reuters.
"The sense we're getting is people are still doing a lot of feasibility studies but that Dublin is most definitely on the agenda."