ACROSS Dublin, signs of a new boom are everywhere.
Cranes again pepper the city centre. Celebrity restaurant hot spot The Ivy has opened close to parliament, hoping for an influx of bankers fleeing Brexit.
In the same complex, Barclays is paying 4,000 euros (S$6,400) a year apiece for car parking spaces and 2.36 million euros annual rent at its new offices. Barclays's rent is 13 per cent more than the most recent estimate for the property, Green Reit Plc, which owns the building, said last week.
Stoked by demand from finance, technology and legal firms, rising prices are helping push office construction back to Celtic Tiger levels.
Then, the boom collapsed, devastating the economy. A decade on, the market is being closely watched for signs of overheating. "It's inevitable that when we have an upswing in the cycle, construction gets going and generally overreaches itself, so that when there's a downturn, there tends to be an oversupply," said Tom Dunne, a real-estate lecturer at the Dublin Institute of Technology. "So what we're really talking about is the extent of that oversupply, and that's really difficult to predict."
More than four million square feet of offices are under construction around Dublin, according to real estate broker HWBC, in a market increasingly underpinned by technology giants.
Facebook is in talks to take over a campus development in the south city of about 450,000 square feet, while Alphabet's Google has agreed terms for 234,000 square feet in the city's docklands, the biggest single deal in the first half of this year.
Salesforce Inc is in talks to lease dockland offices with space for as many as 5,000 workers, the Irish Independent has reported.
"In absolute terms, yes construction now is comparable to the previous boom, but in proportion to the size of the overall market, it is much smaller," Colm Lauder, an analyst at Goodbody Stockbrokers in Dublin, said. "We're adding about 15 per cent to the size of the market in net terms when you take into account offices being replaced or refurbished," he said. "Between 2004 and 2007, the market grew by about 50 per cent, so in relative terms, it's much smaller."
After the 2008 crash, top Dublin office rents fell by as much as 55 per cent. Loans to developers soured, almost toppling the nation's financial system. In 2009, the Irish government set up a so-called bad bank to purge the country's banks of more than 70 billion euros of risky commercial real estate loans.
The key driver of unsustainable credit growth before the bust was "the speculative nature of lending, which left projects reliant on strong final prices rather than a more prudent approach that would have relied on pre-sales or pre-letting", the nation's central bank said in a report earlier this year.
Office buildings now tend to be pre-leased and funded. More than 40 per cent of offices expected to be completed next year are already leased, according to Jones Lang LaSalle.
Barclays, Bank of America Corp and Toronto-Dominion Bank are among the firms that have settled on Dublin as European hubs after Brexit.
"Investment funds and Reits are financing much of the construction today, compared to bank debt in the past," said Marie Hunt, director of research at CBRE Group's Ireland unit.
"They are less likely to back a development without a tenant so that in itself acts as a brake on the market." BLOOMBERG