In 2011, 40 percent of the offices bought or leased in Dublin were acquired by US companies. According to Bloomberg, this trend will increase in 2012 and 2013.
Google Inc. (GOOG), Yelp Inc. (YELP), Salesforce.com Inc., (CRM) Bank of New York Mellon Corp. (BK) and Citigroup Inc. (C) are all investing in additional space in the Irish capital. While Facebook is planning to double the size of their European headquarters in Dublin and PayPal has announced they’ll hire 1,000 people in Dundalk, County Louth.
Robert O’Shea is a partner at legal firm Matheson Ormsby Prentice, who advises U.S. companies on moving to Ireland. He says, “Dublin is a much more cost-competitive destination than it may have been before…That is reflected in the pipeline of projects we would see for 2012 and 2013.”
Due to Ireland’s economic recession, and seeking $89 billion international bailout, commercial property rents in Ireland have plummeted, along with labor costs. This sparked new government initiatives to attract investment.
It would seem that these initiatives are working. US companies bought nine times more office space in Dublin in 2011 than in 2007, according to CBRE Group Inc. (CBG).
The Irish Government has been promoting Ireland’s affordability and its links to the United States. Its plan is to create 100,000 jobs by 2016, bringing unemployment down to 14.3 percent.
Bloomberg reports that in 2007, Ireland was the fifth most expensive location to purchase office space. In 2012 it is ranked 45th.
Ireland’s tax rate is a vital part of what is attracting US companies to Ireland.
Gilt Groupe, an e-commerce company established in 2011, has 70 employees, with 20 of them in Dublin. Fidelma Healy, chief operating officer with the company, said that most of the companies opening in Dublin “put a toe in the water to see what it’s like, see it’s easy to get good staff and then start expanding.”
Last week, MasterCard announced it will employ another 130 people in Dublin over the next four years, while expanding into new offices.
Yelp, a social-networking and local-search company based in San Francisco, is also seeking out additional space in Dublin.
Google employs 2,200 employees in Dublin but eventually 3,000 will be employed in its European headquarters there. The company is close to leasing 32,000 square feet of office space at East Point business park and has also leased the new docklands building, Montevetro.
Another Mountain View-based company, LinkedIn, leased space in 2011 and has increased the number of employees to about 175 from 30 since last year.
Facebook, ahead of its $5 billion initial public offering, is considering leasing the headquarters of the Bank of Ireland. Currently, 380 are employed by their Dublin base.
Paddy Conlon, a CBRE director says financial-services and information-technology companies are showing interest in expanding in Ireland. Salesforce and Citigroup’s Citibank are both looking to rent in the city center.
The Irish Industrial Development Authority (IDA) are already looking ahead to the next wave of companies on their way to Ireland. In fact, they keep a list of companies run by former Google employees to identify future expansion candidates.
In 2010, the IDA set up a new unit to target companies with less than $30 million a year in revenue. Since then five of them have come to Ireland.
IDA Chief Executive Officer Barry O’Leary said, “We’ve already got the top 10 companies born of the Internet. We ain’t gonna stop at that.”