Lack of office space may thwart multinationals, warns IDA
IDA IRELAND has warned of a possible shortage of suitable office space in Dublin to accommodate multinational companies that want to set up or expand here.
“Office space will actually become a challenge for us,” IDA chief executive Barry O’Leary said, as he gave details of its performance securing foreign direct investment (FDI) projects in 2011. This was its best year since 2002.
Client companies of the State’s inward-investment agency generated 13,000 new jobs last year. When job losses are taken into account, this resulted in a net increase in employment of 6,000.
Mr O’Leary said the IDA was confident of winning “a number of large-scale services operations”, particularly in the Dublin area, in the months ahead. But he warned that its ability to attract major FDI projects to the capital could be undermined by the short supply of modern office buildings.
“This might sound a little bit strange but there are really only four or five modern office buildings in Dublin that can take projects of that scale, and if we get a couple of hits in the next couple of months – bearing in mind it takes a good 18 months to design a new building – it is something to be mindful of,” Mr O’Leary said.
“A lot of discussions” were taking place between the IDA and State property agency Nama in relation to the issue.
Multinationals making “decent-sized” investments in jobs in Dublin city required office accommodation in the order of 70,000- 120,000sq ft, at an appropriate standard, Mr O’Leary explained.
“There are buildings available but you’re not going to shift them that quickly to a high-profile multinational.”
A ready supply of the right type of office accommodation is often a significant factor for multinationals making investment decisions. In the case of PayPal, which has created 1,000 jobs in Dundalk, the turnaround was only a couple of months “because there was a building there”, Mr O’Leary said.
Minister for Jobs, Enterprise and Innovation Richard Bruton said the IDA’s warning was “a very clear signal that there is a strong flow of investment and demand for certain types of property” that he was “sure Nama would heed”.
It was in the taxpayers’ interest that the sites and properties managed by Nama would be “well-rented by gilt-edged companies” of the sort the IDA brings to Ireland, he added.
Mr Bruton said the net gain in jobs last year represented “an exceptionally strong performance at a difficult time”.
The estimated net gain of 3,000 in the first half of 2012 was “equally very encouraging”. Some 5,000 jobs were created during this time, with an estimated loss of 2,000 jobs. The total net gain in jobs in 2012 will be at the same level as in 2011, “there or thereabouts”, the IDA forecasts.