FinTech 4.0: Why Blockchain And Cryptocurrencies Are Dublin's Office Market Future
Bitcoin, blockchain and cryptocurrency consultancies are moving into Dublin — and if they follow the pattern of other recent arrivals, then in five to 10 years they could be big business.
Ahead of the Bisnow Dublin Workspace of the Future event on 21 June, Bisnow examines whether the Dublin office market is ready for the latest wave of FinTech buccaneers?
The FinTech revolution 4.0 has already begun. Largely unnoticed, the latest wave of FinTech innovators are putting down roots in Dublin. The latest to arrive — earlier in May — was ConsenSys, Joe Lubin's Brooklyn-based startup established by the co-founder of cryptocurrency Ethereum.
It plans a “decentralised blockchain production studio” in Dublin to match similar ConsenSys hubs in London, Dubai and Paris.
The new Dublin-based Innovation Studio will be a multi-functional facility including a development lab, where engineers will build and deliver Ethereum-based blockchain platforms and products. While it will be a small outfit from a property point of view — perhaps 1K to 2K SF to accomodate 60 staff — it is significant in other ways.
ConsenSys — selected by the European Commission as a partner for its planned Blockchain Observatory and forum — is attracted by the massive overlap between the financial and TMT sectors in Dublin. Only Estonia — a more politically challenging environment in a far distant time zone — offers a similar commitment to new FinTech products.
Dublin's Crypto Coast
This is particularly true of blockchain, a way of recording transactions that places control outside the hands of any individual and outside the risk of tampering, and the system that stands behind most cryptocurrencies. If blockchain becomes a more mainstream technology — and the European Commission is investing heavily in its Blockchain Observatory, devoting €340M by 2020 — Dublin will be well placed to enjoy the benefits.
The so-called Crypto Coast stretching down to Dun Laoghaire is already experiencing an uplift, according to its supporters. Fast expanding Dublin cryptocurrency businesses like Circle are already blazing a trail, whilst Deloitte are bringing their Blockchain Lab to Dublin — just 50 jobs to start with, so not a large office footprint — but a sign of real movement.
Blockchain and cryptocurrency innovators seem to be following a familiar pattern of small-scale migration to Dublin followed by medium-term indigenous growth, JLL Surveyor Neill McNicholas said.
JLL is talking to a FinTech operator looking for 3K to 4K SF in Dublin, typical of the new arrivals. “Remember that 42% of last year’s record office take-up of 3.6M SF was from the tech sector, perhaps half as much again as financial — this is the perfect platform for bitcoin and blockchain, along with the Irish legal and regulatory system,” McNicholas said.
“This is a sector we have to keep our eye on because it follows a pattern which we’ve seen in other sectors where new arrivals start small, then begin to grow.”
Reliable figures for total blockchain and bitcoin deals in Dublin over the last 12 months are hard to find — and may be unobtainable — but the consensus is that it will be around 20K to 30K SF. Not a lot in itself, but as seed-corn it could be important.
Irish Property Embraces Bitcoin?
Friends First Head of Property Claire Solon agrees that from little techy acorns mighty cryptocurrency oaks might grow.
"The rate of growth of Dublin FinTech has been phenomenal, and it tends to be the way things go that new arrivals start small and then grow. Look at how serviced offices have come from nothing in three years, and for FinTech there is a huge underlying market there," she said.
But if blockchain and cryptocurrency become a more everyday aspect of Dublin commercial life, will this extend to the property sector? Solon says that whilst some landlords may be happy to accept rent in bitcoin, many will not — and that the funds and institutions will be the last.
"We'll all have to start looking to see how compatible bitcoin is with our plans. It's only logical to assume some landlords will take rent, it depends on their view, but for many there will be money laundering issues to consider," Solon said.
"We have a strong money laundering policy, accepting payment in bitcoin would be a snag for us, and I've not yet heard of anyone else doing it, but I wouldn't rule it out one day. Assuming, that is, we can find ways to track wealth."
It may be that a recent intervention by the Revenue Commissioners will slow the process down. Irish-registered businesses are not permitted to prepare their accounts in cryptocurrencies such as bitcoin and must convert crypto payments to staff into euro for tax purposes.
Taking bitcoin and blockchain businesses to its heart may take a little work. But the Dublin office market is famously open to newcomers: the city's record-breaking 2017 office take-up is testament to this.
Join the conversation at the Bisnow Dublin Workplace of the Future event on 21 June by registering here.
