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National commercial building vacancy rate hits record high of 14.1%

Sligo, Galway and Donegal are the counties with the highest commercial vacancy rates, with the pandemic’s fallout likely to be a factor nationally.

THE NATIONAL COMMERCIAL building vacancy rate has hit a record high of 14.1%, a 0.2% increase in the twelve months to July 2023.

The pandemic’s fallout, including the move to remote working and online shopping, are likely to be factors.

According to a new report by GeoDirectory, there were 29,798 vacant commercial units across Ireland in June 2023, which was 557 more than the previous year.

Sligo was the county with the highest commercial vacancy rate (19.9%), followed by Galway at 18% and Donegal at 17.9%.

The lowest commercial vacancy rates were recorded in Meath (10.2%), Wexford (10.6%) and Kerry (12.2%).

Ballybofey, Co. Donegal, like last year, is the town with the highest vacancy rate in Ireland, with 29.9% of commercial units empty now.

Geodirectory CEO Dara Keogh told The Journal that the report illustrates how the “real economy” is doing.

“We have GDP figures and GNP, but it can be a bit away from people.” 

The report, he says, is a “barometer of what you see in your day-to-day space”.

In the last year, the percentage of commercial vacancies has increased in 20 of the 26 counties.

“We have a sense that it’s in part due to more businesses closing as a result of fallout from the pandemic,” Keogh said.

Remote working has also meant that many businesses do not need an office space, or are opting for smaller units.

Keogh added that the modernisation of retail, with many shops going partially or completely online, has meant there is less need for street storefronts as “your storefront could be your website”. 

So what do the figures mean for local economies, particularly in counties most affected?

Keogh said that while a certain number of vacancies is normal, “generally speaking, a vacancy isn’t a good thing”.

“The ideal level [of vacancies] would change from place to place. We’d imagine it’s around 10%. But when you’re at 30%, you’re way above that rate.

“It’ll just give a feeling of ‘this place isn’t great, this place isn’t doing as well as it could’.”

He believes busy towns ‘create confidence’ in the area among locals and potential investors.

Notably, Dublin City recorded a 0.5% increase in vacancies in the last year, rising to 13.1%. This trend is also seen in the the rest of the county, where vacancy rates increased from 12.6% in June 2022 to 13% this year.

Galway recorded the largest increase, going from 17.2% to 18% in a year.

Asked whether the empty units could be repurposed for housing to add to the strained market, Keogh said that it depends on the suitability of the space, but “that’s a resource that needs to be more closely looked at” to help with housing supply.

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