ACCORDING to new figures from leading credit and business risk analyst, Vision-net.ie, the increase in new companies being set-up is leading to a shortage of office space, particularly in certain parts of Dublin, but is also a factor which is boosting construction start-ups.
Dublin remains the most popular location for start-ups in Ireland, and this year has accounted for 48% of all new companies formed.
A surge of 4,438 new companies were started in the first quarter of this year – a figure that is up 21% on the average number of start-ups seen in the same period over the previous five years (3,657).
Among those new start-ups, almost 20% have a registered address in either Dublin 1, 2 or 4 – postcodes in Dublin’s tech-focused “Silicon Docks” quarter, which is home to the likes of Google, LinkedIn and Facebook.
The figures follow a recent report by Savills that shows the rate of office lettings rose by more than a third during this year’s first quarter, with rents forecast to climb by a fifth before 2015, due to a shortage of property.
High and increasing demand for commercial space is also influencing a measured revival of both the construction and real estate sectors. There were 332 start-ups in the construction sector in the first quarter – a 16% increase on the average number of construction industry start-ups in the same period over the five years since the onset of the recession.
The average number of real estate start-ups in the period is up 70% over the previous five years with 209 of the quarter’s start-ups operating in this sector.
According to Vision-net.ie’s managing director, Christine Cullen, a rise in construction and real estate start-ups indicates “an upturn in key areas of the economy”.
She said: “As the Irish economy recovers, new and established businesses are seeking to expand their operations beyond what a post-recession property market can currently offer.
“Growth in our commercial sectors is very positive news for job creation and overall economic rejuvenation.
“However, for the long-term survival of new business start-ups, it is vital that there is a balance between demand and supply, to prevent a rent price bubble emerging.”
