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Google’s planned Silicon Docks move would have been one of the biggest property deals in Dublin in years.
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Google has abandoned plans to rent space in Dublin’s docklands for as many as 2,000 workers.
The technology giant had been in talks to rent about 202,000 square feet of space at the Sorting Office, close to the quays, expanding its footprint in the Irish city.
“After much deliberation, Google has decided not to proceed with leasing the Sorting Office. We are grateful to Mapletree for all their work with us, and wish them well in the successful letting of this excellent office building,” a spokesperson told MarketWatch in an emailed statement.
Mapletree Investments is a Singapore-headquartered real-estate investment trust
“We are committed to Ireland and continue to invest in our Irish operations,” the spokesperson added. Google currently employs 8,000 people in Ireland.
The decision by Google, which is owned by Alphabet GOOGL, -2.96%, comes as office takeup in Dublin during the second quarter of 2020 reached only 9,885 square meters — the lowest quarterly takeup ever recorded in the capital — as many transactions were canceled or put on hold as a result of COVID-19 lockdown, according to figures from the CBRE.
The property consultancy’s data showed that, unusually, the computers and technology sector accounted for only 8% of takeup in Dublin during the period, with manufacturing industrial and energy companies, and the public sector being the largest takers of accommodation, accounting for 35% and 23% of takeup respectively.
It also comes a day after Ireland’s economy officially entered into recession, shrinking by 6.1% between April and June as the impact of the pandemic triggered the largest quarterly drop on record, according to data from the Central Statistics Office.
Google said in July that most of its employees will be allowed to work from home until July 2021, due to the COVID-19 pandemic.
The “Silicon Docks” in Dublin are home to many American tech companies drawn to Ireland by the country’s attractive 12.5% corporate tax rates — the lowest in Western Europe — as well as its technically-educated labor force and proximity to European markets.
Apple AAPL, +0.06%, Microsoft MSFT, -1.40%, Amazon AMZN, -2.17%, LinkedIn, Airbnb, and smaller companies including Slack WORK, -6.16% and Glassdoor are among those with a footprint in Ireland.
For years, several tech companies have taken advantage of loose tax regulations in Ireland in a quirky arrangement called the “Double Irish.” Under the scheme, companies are able to incorporate in Ireland while keeping tax residency elsewhere, such as in an offshore tax haven. This arrangement allows them to channel profits through Ireland to Irish-registered firms elsewhere.
Read: Apple wins EU court battle over unpaid Irish tax bill of $15 billion
However, as the U.S. and Europe move toward a more comprehensive tax regime to try to claw back revenues from big tech, some experts have suggested that tax schemes like the “Double Irish” may become more difficult.
But Ireland is likely to remain a hub for many U.S.-based tech companies, as well as other international groups. Social media app TikTok, which is owned by China’s ByteDance, recently said it would be investing as much as $500 million to build its first-ever European data center in Ireland. Scheduled to open in 2022, the data center is predicted to create hundreds of jobs.
