By Irish standards, IPUT is old money. Established in 1967, the Irish Property Unit Trust is the biggest owner of office buildings in Dublin. 

But IPUT’s CEO Niall Gaffney is thinking bigger. His inspiration is the Grosvenor Estate, owner of the swanky London neighbourhoods of Mayfair and Belgravia. 

The Grosvenor Estate has existed in its current form for 340 years, though it goes back even further than that. Asked by a reporter what he’d say to aspiring entrepreneurs, the Grosvenor Estate’s owner once said: “Make sure they have an ancestor who was a very close friend of William the Conqueror.”

The Grosvenor Estate is a model for Gaffney for the way it cultivates whole neighbourhoods, rather than just buildings. It consciously makes atmospheric places where people love to be. 

“They’ve fastidiously upgraded the paving, the lighting, the public art, the public realm, the planting,” says Gaffney. “They’re very careful. They work closely with the city council, constantly reinforcing the value of their own estate. And they’ve been doing this for hundreds of years.

“So pandemics will come and go, recessions will come and go. But Grosvenor square, Barclay square – people love going to those squares. They like sitting on the benches, they like admiring the trees, looking up at the buildings.”

It comes back to where great places come from. People instinctively know what makes a great place. Great places lift their spirits. They’re places where people like to stroll, meet, and hang out. 

But great places are rare. It’s an oddity that, in the last century, mankind seems to have lost the knack for making them. Great urban places tend to be old. They’re found more often in pre 1900 urban centres than in new suburbs. They’re found more often in old European and Asian cities, not new American or Australian ones.

How we lost the knack for making great places is another story. But suffice to say that over the last 100 years, architects and developers have failed to build urban places that people love. Modern cities are full of hostile, blank-faced buildings which actively repel people.

Great urban places tend to be very old. So it can be a bit unclear how they came about. Gaffney says great urban places have come, not from governments, but from “enlightened” private developers. Gaffney says that’s how Dublin “ended up with great squares around Dublin such as Mountjoy square, Merrion square. Again, those buildings, those residences were valuable, because of their situation around a square like that.”

IPUT says it wants to go back to an older mode of development. Its new report is about what it calls “workplacemaking” — the idea that workers will be attracted back to the city by great places, and that IPUT’s office buildings can contribute to that. “Neighborhoods will be the driver, and not necessarily specific real estate,” says Gaffney. “So if you create and support the neighborhoods, in the long term, it will be a driver for occupiers.”

The pandemic has made this much more urgent for IPUT. The firm is the biggest owner of office buildings in Dublin; 98 per cent of its portfolio is in the capital. 72 per cent of its portfolio is in offices. All its offices are in central Dublin. A secular shift to remote working would absolutely not be good new for the firm.

All the talk of workplacemaking is partially aimed at enticing workers back into the city, and out of their homes. Gaffney says: “we’ve a lot of work to do to make him make offices more attractive and compete with the home.”


Sean Keyes: Having gone through the full cycle of working from home to office to working from home again, I have a new appreciation for full-time office work.

Niall Gaffney: I think we’ve a lot of work to do to make offices more attractive and compete with the home. But I think to an extent, as you’ve experienced yourself personally, and we’ve all experienced, I think the great experiment is living at work at the moment. The idea of living at work, as we’ve explored in the report, is something that you would have seen in the pre and early industrialisation phase. Where you have the Guinness workers living in the cottages near the brewery, the mill workers living down the road from the mill. How far have we actually moved on from that, given what digitalisation has done for us.  We’ve effectively gone back full circle.

It’s a very human thing. One of the key findings [in the report] is that work is a social experience. And it’s dominated by that. And a lot of the findings that you’ve read in the report, you’ve seen the report. Spontaneous social encounters with colleagues are what typically people miss the most. And typically, that’s why you go to work. You go there to earn money, go earn a living. But it’s a social experience.

This is we started looking at it, as a property developer. People asked “why are you getting into this fluffy stuff?” But ultimately, it is the fluffy stuff that’s going to drive recovery, drive value, drive resilience, into a long term. It’s the holistic way of looking at work. Work has changed so dramatically. If you understand work, you’ll be able to design better workplaces. If you can design better workplaces, you’ll design better cities. And ultimately, that kind of virtuous circle should reinforce itself to reinforce the value the importance, the social, cultural and economic drivers that make cities great places for innovation. 

They’re the heartbeat of an economy. They’re the heartbeat of Ireland’s economy. And kind of look at it and say, the heart’s been ripped out of our cities, ripped out of our economy at the moment. And we’ve got to get cities back on their feet. We’ve got to get workplaces back. The idea of people staying out of work for another six months – what’s that going to do to our economy, what’s it going to do to our city, our culture? 

Urbanisation isn’t just going to fall into the sea. The world has been urbanising at a rapid rate for the last century. In our view, it’s not going to go into reverse. It’s going to be challenged by this. And I suppose what we’re trying to do with this piece of research is look at that holistic approach to work.

We’re in the process of building a city centre development in Wilton Park, which in an Irish context, will be the size of a small town. It will ultimately employ 5,000 people in that location. With 600,000 square feet, which has been pre-let to LinkedIn, we have over 30,000 square feet of commercial space at ground floor street level that we want to curate. We have a triangular one-acre park in front of the development overlooking the cycle lane there, at the Grand Canal, and that’s the centrepiece of our development. 

 The ground floor space will effectively be the marketing tool the for the entire place. 

Niall Gaffney

SK: I was looking at the plans for Wilton Park and it reminds me of the new Bloomberg headquarters in the City of London.

NG: Oh yeah, I got a tour of it. 

Look, we’ve been around for 50 years. We wouldn’t be high profile, because we’re not a public company. But we own more office buildings in Dublin than anybody else. We’ve developed the Earlsfort Centre, we’ve developed on Molesworth Street, the new AIB HQ. We’re building the tropical fruit warehouse on the quays. But prior to that, we would have owned buildings for a long period of time, and we would have been typically institutional – we’d buy them, manage them, collect the rent and then sell them.

We’ve gone into a phase in the last five years of redeveloping our own buildings. And it’s given us an opportunity to say, “Well, if we’re going to do it, let’s do it right. Let’s try and develop for the long term, let’s build for long term. Let’s build in sustainability credentials, and basically future-proof these buildings”. 

So when you see something like this coming along – the pandemic – and you look across the water, and whether that’s the Atlantic or the Irish Sea, take your pick. The great metropolises like London or New York. And you see what they do, and how they do it for the long term. The great family estates in the UK, great family estates in London, or the great landed families in New York. And you see how they develop and hold buildings for generations. And what they do in terms of curating a neighbourhood. And what that neighbourhood does in terms of reinforcing value. 

So you look at somewhere like Bryant Park in New York, the owners of all those plots around Bryant Park got together and reimagined Bryant Park into something that’s a driver of huge footfall, a driver of huge value into that part of Midtown Manhattan. And you look the Grosvenor Estate, the Crown Estate – but Grosvenor in particular. Grosvenor is a family business. They own Mayfair. But they’ve fastidiously upgraded the paving, the lighting, the public art, the public realm, the planting. They’re very careful. They work closely with the City Council, constantly reinforcing the value of their own estate. And we’re doing this for hundreds of years. So pandemics will come and go, recessions will come and go. But Grosvenor square, Barclay square – people love going to those squares. They like sitting on the benches, they like admiring the trees, looking up at the buildings. They were all built by developers. Just very enlightened developers. 

I think in Dublin, we need to revisit that. Some of the great developers in Dublin go back to the Guinnesses, they go back to Shackletons. They go back to those employers with a conscience, who developed estates but also developed with their employees well-being in mind. And then they ended up with great squares around Dublin such as Mountjoy square, Merrion square. Again, those buildings, those residences were valuable, because of their situation around a square like that. I think that’s a very basic example, in Dublin, but its what we can do now at the next level. 

And Bloomberg – its incredible that you say it – when we were looking to learn about how to develop somewhere like Wilton Park, and looking at global benchmarks, we went and visited places like the Bloomberg building. Like One Vanderbilt that’s being built in New York beside Grand Central Station. 

We looked at how these developers consider the neighbourhood as a holistic project, and look at it over the longer term. Certainly with Bloomberg, that was a pet project of Michael Bloomberg. But it’s funny when you think of Bloomberg now and certainly if I do, I will think of the green-sustainable, wellbeing credentials of that brand because of what he’s done with that building. That is a pandemic proof building. And it was built two years ago. It’s  naturally ventilated, it has great light, great space, great circulation, space. It ticks so many boxes. If you’re an employee, the culture and values that building represents for his business is phenomenal.

Placemaking at Bloomberg’s new HQ in London

And I think those who embrace that will be better served, I think that’s what we’re looking at Wilton Park. We have a very good partner in the form of LinkedIn. LinkedIn have quite an enlightened view in terms of their role in the community, their role in terms of getting their employees to look outwards. They don’t feed everybody in-house, they encourage people to go out into the community and spend their money at lunchtime and spend the money in the evening. 

So there’s a collaboration that needs to happen as you move forward between major employers and developers, and the city. I mean, the city as in the local authority, the government, city fathers, the city designers, the city makers. 

The employer is a huge influence. Major corporations in this city, their attitude to building campuses where everything is provided in-house, on a campus style, isn’t a positive energy in a community. 

It’s the idea of turning your back on the community. Particularly now, we want to get food and beverage suppliers, we want to get the local coffee shop, sandwich makers, restaurants, delis, back up on their feet. The way to do that is to give people lunch vouchers and  let them go and get their lunch outside. Not provide everything in house for them.

The vision for IPUT’s Wilton Park.

SK: Your report says “while there is ample space to retrofit the suburbs to become more workable, it may be more challenging to make commercial city centres more liveable.” Will IPUT be broadening out from Dublin City centre?

NG: I think certainly what we would see as the city centre is key to the recovery in the office and the workplace. We don’t believe necessarily in dispersed offices. I think what we are saying is we see the city centre as being the hub for that interaction that that whole experience of work, the serendipitous meeting of people where great ideas happen. They happen at the fringes of buildings, they happen within the parks around buildings, they happen at spaces in between buildings and the home. I get that point, but I still think the city centre is key. I think suburban offices have a role, as they do at the moment. There will be continued diversification and decentralisation. 

But I still believe the transport hubs, the ability to have so many complementary and contrasting uses within a city centre is key to the vibrancy, restoring the vibrancy and sustainability of cities. You need to get people back into those cities. And I think having high-density offices in a city are fine if they’re well designed. And if the spaces in between the offices, the spaces that surround the offices, the neighbourhoods are well designed.

Major corporations in this city, their attitude to building campuses where everything is provided in-house, on a campus style, isn’t a positive energy in a community. It’s the idea of turning your back on the community. 

Niall Gaffney

SK: An active public realm is a nice idea. But it sounds more expensive than wrapping a building in glass and putting a single door on it. How much cost does this approach add, compared to a traditional office development?

NG: If we take a step back. When we were looking at developing 10 Molesworth Street, we also developed 40 Molesworth Street, which was the old European Union head office. As a developer, it was our first step into high end, large scale office development. And we took it very seriously. I mean, you’re developing on one of the main thoroughfares next to our parliament building. And as people who are charged with managing this business, we felt an obligation to do it right. You know, we have a vision, the overriding strategy we have is to set a benchmark for excellence and whatever way we can to positively shape the future of the city. So we’ve been around for 50 years, and we like to see ourselves almost as custodians of parts of the city that we are very privileged to own and manage. 

So taking that approach, as a custodian, we say, right, if we’re going to demolish the old passport office, and we’re going to demolish the European Union Building, both buildings have been there for 40 years. We have an opportunity now once in a generation opportunity to put something up of merit, of decent quality, and that will set a benchmark. And ultimately we will get it back in return. So we let 10 Molesworth Street to AIB, we let 40 Molesworth Street to a Walmart subsidiary called Jet. And we got attractive rent, and attractive lease terms, we believe because of the quality of what we produced. Both occupiers are very happy with the building, very happy with the location. But we went the extra distance. We paved the streets around both those buildings in granite – not concrete paving, but granite paving. We worked with the local authority to take up the plane trees that were effectively breaking up the footpath and were not properly planted. And we put in a new planting regime that has been accepted and welcomed by the public.

10 Molesworth Street.


So, you know, decent paving, decent planting, it was a small contribution, but it was a decent contribution. And we felt an obligation to do it right there, in such a high profile location. Now, we’re long term investors, and we’re holding those assets long term. Planning policy has to reflect the fact that you may or may not be long term, but there’s certain ground rules in terms of how you should treat the streetscape and the the the urban fabric of the city. And to be fair, we work closely with the conservation architects and planners in the area. 

And yes, it is more expensive to do it right. But as a long term investor, we believe you’ll reap the benefits through future-proofing that location, that building with that type of quality, with green credentials. That building is a LEED Platinum rated building. So it is a sustainable office building. 

What is going to happen now is investors, particularly global institutional investors, for them the ESG agenda is now front and centre. And if you’re a fund manager or a fund investor, and you’re investing in stocks and shares, there is an ESG agenda in terms of how your portfolio is being valued. The same as applying to real estate, where assets, property assets that are not sustainably built do not have a sustainable future, and they will be discounted. And ultimately, it will hit the bottom line, it will hit share price, it will hit the value of your investments. So for us, it’s a long term approach to investing. It has the benefits of supporting the environment, supporting the community supporting the fabric of Dublin city. But ultimately, it’s the right thing to do and should reinforce the value of your investments over the long term. 

Initially, there is more effort and expense required to build those buildings the right way. We’re doing it at Wilton, where we’re aiming for LEED Platinum, which is the premier accreditation for sustainable buildings. 

But in the same way you referenced Bloomberg, he went the extra mile to create a building that was ahead of the then-prevailing sustainability credentials. And now, they’re right on them. And people are coming up to meet that standard. For his peer group, if they’re renting a building or developing their own building, and you’re in that Bloomberg cohort looking for something similar to to attract and retain employees in the future.

SK: The report talks a lot about flexibility. Everybody now wants a greater degree of flexibility in how they’re going to work. But ultimately, will flexibility just mean more working from home and less demand for office space? Will companies optimise their use of space to leverage people working from home, and ultimately save money on rent?

NG: Our thought process around the future of the office, pre-Covid, has just been accelerated. 

I think the qualities of human interaction in the workplace will remain very hard to replicate online over teams calls, over video links. And I think what our findings and our interviews have shown from some of the leading employers and people who design workplaces was that the number one reason that people come to the office is for social interaction. Offices need to  become more inherently social. And they need to design buildings and design around the edges of buildings to allow people have that passive, that commercial, that recreational way of hanging out. We call it creating a watering hole. 

Our experience in talking to major multinationals in the last few months is that they see a requirement for more space rather than less.

Niall Gaffney

A watering hole is where people can benefit from that community of like minded people at work. The company will benefit from greater productivity. The city benefits from the diversity of different communities in the cities when you look at multinational employees hanging around around these campuses and city campuses. And then citizens in the city generally benefit from a diverse mix of people that bring social capital to a city like Dublin. 

So what we’ve seen, what we’ve experienced with the relationship with some of the occupiers that we’re dealing with, they’re seeing less use of desks but greater collaboration space, greater breakout space, meeting space. That watering hole idea. There’ll be more and more of those types of space that allow people naturally collaborate naturally breakout, naturally work off their laptops or collaborate with people. And that will actually require more space. So desks will still exist. Possibly people will be at the desk three days a week. The other two days a week, they’ll be in around their desks, in around the office. 

Work was moving that way anyway. Like you’d see those town halls – every office building in the last five years has a town hall, an all-hands space with big bleachers. The central bank even has one in their new offices. Huge spaces in the center of a building in the middle of an atrium, that people hang out in, and they spend half their day there working, talking, collaborating, socializing. They still have their desks. Their desks are still there. But our experience in talking to major multinationals in the last few months, they actually see a requirement for more space rather than less space. A greater ability to socialise safely means a lower density of space. Circulation space will be increased, if you need to maintain some level of distancing, whether it’s one metre or otherwise. But we’ve seen greater use of outdoor terraces, greater requirement for outdoors terraces. We see greater use for these little pocket parks or outside benches or benches within and outside atriums. We see more and more of that, which is just going to make work more sociable. 

But I don’t see people abandoning the office in the city centre to work at home. I think it depends on the type of work you’re doing. But certainly, the whole ability to create a culture, a culture of innovation, a collaborative culture. The key to that is person to person interaction in the office. The whole idea of trying to create a corporate culture, you need a place to do that. And people need to come together in a place to that. And the most obvious place is the workplace. And that workplace needs to be designed in a way that, I guess essentially brings those human factors into play.

SK: I would agree that in order to entice people from their homes, you need to create great places, as you have been saying. But I do wonder if people will still want to work from home a certain amount of time. It might not be five days a week, but it might be one day a week or two days. And I wonder whether, with employees out of the office one or two days a week, whether companies will optimise their use of space so that they need to rent less of it. 


Flexible terms?

Retailers, hoteliers and co-working companies have all said the same thing to me this year: commercial landlords need to offer more flexible terms. Rent has crucified many businesses during the pandemic. 

All these firms say they want a portion of their rent to be tied to revenue. It would cushion tenants’ businesses during bad times, and increase landlords’ returns during good times. 

Given the long-term decline in yields, is there room for landlords to boost their yields by offering flexible terms?

Looking at your lease terms with tenants, your report talks a lot about increased flexibility at work. But I also hear from businesses that they’re seeking flexibility from their landlords in their lease terms. For example more break clauses, or a portion of floating rent which is tied to revenue. Is IPUT open to greater flexibility in the terms it offers tenants?

NG: Ultimately, for developers like us to commit the type of capital you need to develop the spaces of the future, and innovative office spaces of the future that will drive corporate culture, you need a minimum lease commitment. And that is not going to change. 

The commitment to provide the type of space that people really want into the future will require a typical commercial lease. And that’s usually a 10 year lease, 10 year lease terms. That’s to allow you form and develop in a normal rational way an office development of that type of quality, that type of scale. Otherwise, it won’t happen. And that’s just a commercial reality of it. And if the forces of demand and supply at the moment, the supply of office space, in Dublin is not at a point where it’s an issue. Most of the space to be delivered over the next 24 months is already pre-let, I think two thirds of all the space being delivered in Dublin at the moment is pre-let. So you don’t suspect this is a bubble, you don’t have a situation where office space is in excess office supplies and excessive demand.

And in that context, we still see Dublin’s exposure to digital economies, digital industries, as a global hub for that. If anything this pandemic has reinforced the value of those companies. It has made them more productive. Their share prices have responded. So the major corporations we see in the city are all in a growth phase. And as you know, yourself, if you read about Amazon taking space not just on the logistics side, but also office space. Facebook are doing something similar, they’re taking office space. And a lot of this runs contrary to public pronouncements. But ultimately, these major corporations are in a growth phase. And I think if anything, the pandemic has accelerated their growth. I think that that will result in greater demand for floor space.

You’re seeing it with with institutional money investing in Dublin over the last number of months. The long term German investor seeing through the short term volatility and seeing through the short term implications of the pandemic, and committing major capital to buy office investments in Dublin city. The most recent one being the sale of Baggot Plaza leased to Bank of Ireland. Bank of Ireland is not occupying the building presently, yet that investors still bought a building and paid a yield of close to four per cent for that investment. It’s a long term lease, and a well-located building in the heart of the CBD with good transport links. So that’s what they’re looking at. 

They’re looking past the short term and saying, that’s the value of a building in a prime location on a good lease with a strong occupier, and they’re willing to pay for it. And you’ve examples of that around the city now where you have numerous investments that are in negotiation or under offer with institutional money, long term money, that sees past this short term volatility. 

SK: And yields are holding steady at around four per cent.

NG: They’re strong prices. And all of those investments, if they’re well let, in prime locations, with good quality building characteristics – particularly if they’re sustainably built. And you’ve seen that with the possible sale of the Slack HQ on Fitzwilliam Street. You’ve got major corporate, major institutional long term capital willing to buy those buildings. So they’re effectively voting with their feet, they’re showing confidence in a long term, sustainable nature in not just Dublin, but in offices as an investment class.  

I think neighbourhoods will be the driver, and not necessarily specific real estate. 

Niall Gaffney

SK: The long-term trend is for offices to have much less space per person. How does workplacemaking fit in? Will these offices end up more or less dense than before?

NG: I think it’s going to be a hybrid where you’re creating ground-floor spaces in particular, that are more active. They’re more active to the street, more active to the occupier. And more alive to creating an urban grain around your development. So when we see something like Wilton, we’ve pre-let the entire office space. 

We now have a proportion of ground floor space that we’re not looking to drive returns from. The ground floor space will effectively be the marketing tool for the entire place. The fact that we’ve pre-let the entire space to an occupier like LinkedIn means that we can invest in that ground floor space. We can look at identifying food hall operators that have a genuine local following. And curate our space to create a location that is attractive to the city. And not just a short term fix – “get that space let, get in a chain store, get a food chain to operate it”. It’s back to this idea of making a place, and making something for the longer term. Which ultimately, we’ll be able to leverage the value of, and make the place more attractive. 

And you have to look at examples around the world where that happens organically or naturally. So people go “well, Shoreditch is really cool, because it has great food operators and bars and nooks and crannies”. Why has that attracted major occupiers such as Google and Amazon into that location, the Silicon Roundabout? It’s because the place itself, the neighbourhood itself, has been curated in one way. But it’s also been an attractive neighbourhood for that type of occupiers. So I think neighbourhoods will be the driver, and not necessarily specific real estate. So if you create and support the neighbourhoods, in the long term, it will be a driver for occupiers. 


The Germanic view

I was in the Lake District recently. It’s a beautiful landscape of mountains, valleys and lakes. From a distance it looks like Connemara or Donegal. But at ground level, it feels different. 

What makes it feel different from Ireland is the way the land has been husbanded. There are acres of beautiful oak trees and manicured paths along every road. Every fence has a sturdy stile or iron gate. 

I learned that the landscape is so well preserved around Hawkshead because it was owned by a handful of aristocratic landowners. Their families stewarded it for hundreds of years, and then gave it over to the UK’s National Trust for preservation. Like in Mayfair, the long-term owners (who didn’t have to worry about scratching out a living from the land) did a good job of cultivating and maintaining the place. 

Long term ownership came up a number of times in our conversation. Gaffney talked about IPUT’s long term ownership of buildings, of the great American and British estates, and about how new investors from Europe with a “longer term, Germanic view of investment” have changed the types of building IPUT makes.

SK: How does your ownership structure, as a privately held fund, inform what you do?

NG: Yeah, I think we’re fortunate we’re privileged in a way that we have the ability to think long term, because the shareholders we have are long term. And the role we have in the city, we take seriously. And I suppose we’re grasping the opportunity now where we can, in a development phase, that we’re able to do something like Molesworth Street, or indeed Wilton Park, it’s a great opportunity for us to leave a legacy and to positively shape the city in some way. 

And working with the City Council, they have been supportive. They get bad press, but the city council have been supportive and the planners have been proactive. And they’re assisting and collaborating with us and trying to deliver a decent public realm down there. And it’s unfortunate, we don’t have more opportunities for others in the city to do the same and work with planners like that. I think the type of capital that we have coming into the city now is becoming more long term. I think in the last boom-bust cycle, it was very short term and very hard for, for those types of investors to be serious about placemaking because it’s not in the nature of their business model. So as a more medium to longer-term approach is more for long term owners like ourselves and people that are rooted in the city.

SK: Has the influx of foreign capital to Dublin allowed for more long term investment?

NG: It’s starting to. Where you have that longer term Germanic view of investment. Where they will want to hold for a decade or more. That when you get long term thinking and being more sustainable about the quality of the buildings and quality of what’s being produced, because they can see from their own experience, that it comes back to you. Being able to re-let the building. Being able to do a decent rent review because the building has the right credentials to attract tenants and retain value. And that’s what we’re about. This research we’re doing is trying to identify the ingredients that will allow you future-proof your places. Which is good for the city, the economy, the country. 

How do you future proof the city? At a very macro level, that’s building a metro and a port tunnel, or a metro system, that’s long term resilience. Take it down to real estate level, it’s making sure you have a building and the spaces around that building and in between those buildings that attract people for the long term and make a place in a real sense. I think that’s where we’re coming from.