Ireland:
Real Estate Update: Tech Spec For Workspace
02 December 2015
Mason Hayes & Curran
To print this article, all you need is to be registered or login on Mondaq.com.
Housing nine of the top ten global ICT companies, Ireland has
become an international hub for tech activity. We examine some
of the requirements which are important to tech tenants when
leasing premises in Ireland and contrast those with the often
conflicting needs of landlords. We also suggest steps Ireland
could take to provide more suitable office space for tech
tenants.
A comparison of tech tenant and usual landlord positions on
lease provisions shows that there are substantial differences.
Getting suitable space on appropriate terms is also a key
requirement for any business. Ireland will copper-fasten its
position as a leading centre for ICT business if it can reduce
these differences while increasing available space.
The following table contrasts the key tech tenant requirements
with the generally applicable position of landlords.
Tech Tenant
|
Landlord
|
Term of Lease
Tech start-ups generally require short term leases and/or early
break options, as they have the potential to grow exponentially and
therefore outgrow the space quickly.
|
Term of Lease
Landlords (and their debt funders) require certainty of return on
their investment, resulting in a reluctance to provide space on a
short term/flexible basis.
|
Fit Out
Tech companies provide a holistic offering for their staff and the
fit out often includes a gym, canteen and other employee friendly
facilities.
|
Fit Out
Landlords generally provide generic shell and core fit out and
require full reinstatement to this condition at the end of the
lease. This exposes tech tenants to extensive expenditure,
both on commencement (fit out) and on termination
(reinstatement).
|
Access
Tech companies need 24-7-365 access as their service is global and
not limited to a couple of time zones or affected by particular
national holidays.
|
Access
Such access is only really an issue if the building is multi
tenanted. Other tenants may refuse to pay towards out of hours
operational costs. The tech tenant may end up having to bear
all the cost itself.
|
Security
Tech companies may require their own security and seek to restrict
access for the landlord and its agents to certain areas within the
premises. They may also require Non-Disclosure Agreements (NDAs) to
be signed.
|
Security
Landlords are often uncomfortable signing an NDA and will want to
be able to access the entire property to ensure their investment is
being protected and maintained.
|
Exclusivity
Tech tenants may wish to prevent the letting of other parts of the
building to competitors, despite a desire to be located near other
tech companies.
|
Exclusivity
Landlords wish to retain flexibility and will not want any
restriction on the tech competitors permitted to occupy other parts
of the building.
|
Flexibility and Informality
Tech tenants often expect their informal approach in business to
be reflected in lease documentation. Examples include removing
certain standard lease restrictions such as having to obtain the
landlord’s consent to minor alterations or to pet animals
being on the premises.
|
Flexibility and Informality
Landlords generally require consent to be obtained for all works,
and are unlikely to be enthusiastic about pets being brought to the
office!
|
Comments
To ensure that the Irish tech sector continues to flourish, we
need landlords who know the tech business and are willing to make
space available on terms which suit tech tenants. While the
private sector provides some solutions (e.g. Dogpatch Labs and
Gravity Centres), the Irish market needs more. In the past,
IDA Ireland has built advance factories, and advance technology
buildings for pharma companies to encourage inward
investment. Perhaps the IDA could establish a tech office park
with incubation space for start-ups and larger areas for companies
which have established but not yet gone viral? This could be
run by an investor with suitable finance or by a State
agency.
The content of this article is intended to provide a general guide
to the subject matter. Specialist advice should be sought about your
specific circumstances.
POPULAR ARTICLES ON: Real Estate and Construction from Ireland
Construction Comparative Guide
Charles Russell Speechlys
Construction Comparative Guide for the jurisdiction of UK, check out our comparative guides section to compare across multiple countries
Bail commercial et obligation de délivrance
Grant Thornton Société d’Avocats
Dans un arrêt inédit du 23 octobre 2023, la Cour de cassation a posé un principe intéressant et qui mérite attention pour tous les restaurants, restaurateurs...
Q&A On UK High Street Rental Auctions
Greenberg Traurig, LLP
The Levelling-up and Regeneration Act 2023 (LURA), which became law on 26 October 2023, makes various changes to local government and planning legislation with the objective, amongst others, of helping...