(Bloomberg) — Alphabet Inc’s Google unit walked away from a plan to rent space in Dublin for as many 2,000 workers, shelving one of the city’s biggest real-estate deals in recent years.
Google had been in talks to rent about 202,000 sq ft (18,766 square meters) of space at the Sorting Office, close to the Irish capital’s south quays, adding to its array of sites in the city.
“After much deliberation, Google has decided not to proceed,” a company spokeswoman said in an email response to questions from Bloomberg. The company didn’t say why it chose not to go ahead with the deal for the building.
Google is a vast player in Dublin’s real estate scene, employing thousands of workers and occupying offices around the city’s so-called Silicon Docks. While the company plans to continue to invest in its Irish operations, the decision not to proceed with the new leasing will be keenly watched, as investors weigh the impact of the coronavirus outbreak on the city.
As Virus Eases, Ireland Sees Ghosts of 2008 Economic Crash
Companies like Twitter Inc., Google and Facebook Inc. helped revive the country after the nation’s real estate bust, while overseas cash poured in to help build offices and apartments. In the second quarter, though, firms rented 9,885 square meters (11,822 square feet) in Dublin, the least on record, according to CBRE Inc.
On Tuesday, shares in Hibernia REIT Plc, whose clients including Twitter, dropped 2%. Irish Residential Properties REIT plc dropped 1.4%. The Sorting Office is controlled by Singapore-based Mapletree Investments Pte Ltd, which owns and and manages about $61 billion of assets, according to its website.
Google’s decision presumably likely reflect “longer lasting implications of more staff potentially working from home well beyond Covid,” said Eamonn Hughes and Barry Egan, analysts at Goodbody Stockbrokers, wrote in a note on Tuesday.
“We believe the developments on the real estate side are worth watching and, in some respects, already reflect changes in evidence at the Irish banks in the first half,” the analysts wrote.
(Adds analyst comments from seventh paragraph)
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