Tough funding constraints by the banks continue to keep a lid on speculative developments in the Republic's office sector, according to a new report by property agents Savills.
Four years ago the post-crisis surge in construction had fuelled concerns of a supply glut in the industry.
But a study by Savills executives Andrew Cunningham and Christopher Boyce shows the number of new buildings has consistently fallen short of expectations despite the steadily strengthening economy and rising employment levels.
In Savills' skyline survey, Mr Boyce pointed out the 2.17 million sq ft of new office space due for completion in Dublin this year represents "a 55% fall on what was estimated back in 2015".
The slower than anticipated construction pace is largely attributable to the stricter financing environment, according to Mr Cunningham.
He argues that while private developers account for more than half the office development pipeline, they struggle to land the necessary funding to start construction without substantial pre-letting agreements.
In the boom era, banks piled into speculative developments, even in the absence of indicative demand from future tenants.
Mr Cunningham says lenders now steer clear of new projects unless tenants have signed up to 25%-30% of the space.
The report pours cold water on fears of a bubble in the speculative office sector, with Mr Cunningham noting the number of projects in a two-year pipeline tend to halve in volume amid funding constraints, competition for tenants, planning disputes and legal issues.
The report shows of the 202 new office buildings planned for Dublin over the next three years only half are likely to be delivered, even as vacancy rates in completed complexes remain at 6%-7%.
Michael Healy, who launched Savills serviced office sourcing and price comparison platform Workthere, said: "Desks are being absorbed both by start-ups and established multi-nationals requiring permanent, swing and project related space."
The Savills report comes as Bank of Ireland releases its latest Economic Pulse survey, which shows business sentiment in the Republic is now at its highest in almost two years.
According to the report, the optimism chimes with the more upbeat mood among Irish consumers, with two in three households planning to spend the same or more on holidays this year.
Firms in the accommodation and food sectors are also positive about their prospects.