A SURGE IN the number of new companies set up this year has led to a shortage of office space, analysts have warned.

But this is some much-needed good news for one industry. It is stoking the construction sector, which is also experiencing an increase in the number of new start-ups.

Figures from Vision-net.ie reveal that 4,438 new companies were set up in the first quarter of this year, an increase of 21% on the average across the past five years.

One-fifth chose to locate in either Dublin 1, 2 or 4, or in what has now been dubbed the Silicon Docks tech-hub.

Christine Cullen, managing director of Vision-net.ie, said the growth in commercial sectors is “very positive news for job creation and overall economic rejuvenation”.

However, she stressed that a rent bubble must not emerge.

A balance between supply and demand is needed to ensure “the long-term survival of new business start-ups”.

A recent report from Savills revealed that 57,000 square metres of office lettings were signed in the first three months of 2014 – a 32% increase on last year.

Source: Savills