UK firms ‘actively engaged’ in hunt for Dublin offices, says Green Reit

UK firms looking to move business to the Republic in the aftermath of Britain's vote to leave the European Union are beginning to actively seek office space here, according to Green Reit chief executive Pat Gunne.

Addressing shareholders at the property investment group’s annual general meeting in Dublin, Mr Gunne said inquiries had now moved on to “a couple of hardened requirements” for office space in Dublin.

Transactions will start to be agreed in the first quarter of 2017, he added.

“We are now starting to see companies starting actively to engage in the Dublin market,” said Mr Gunne. He acknowledged, however, that most activity remains purely exploratory and said it was “really too early to call” how much business may move to Dublin from London.

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Reluctant

Speaking to The Irish Times after the meeting, Mr Gunne said that overseas financial firms already with a presence in Ireland that are considering taking on additional office space in Dublin are generally reluctant to say it's related to the UK's decision to quit the European Union.

"The last thing they're going to say is that it's Brexit related, because ultimately that gets back to the UK, which leads to more questions that companies have to answer," he said, declining to identify any individual companies.

Green Reit's €1.24 billion property portfolio includes several high-specification office buildings in Dublin, including One Albert Quay and Block A in George's Quay Plaza. The company is developing One Molesworth Street at the corner of Molesworth Street and Dawson Street in the city centre.

Exemptions

Meanwhile, he said the Government’s recent move to impose a 20 per cent withholding tax on many overseas investors who have used tax-efficient fund structures to hold Irish property acquired in recent years is being viewed by many in the market as “an anti foreign-capital message”.

He said the decision, while it will have a number of exemptions for investors, may lead to a widening of valuation differences between prime and non-prime property assets.

“The affected guys that hold assets in funds like Icavs [Irish Collective Asset-management Vehicles] are typically the private equity types and major funds that have bought assets from banks,” said Mr Gunne. “They are holding a lot of the non-prime assets out there. And, ultimately, if you stop these guys coming into Ireland you’re going to have more supply of property in the market than demand from the capital side.”