A shortage of office space in the docklands area and in Dublin generally is a serious constraint on the expansion of the financial services industry and is undermining the "docklands hub" concept, a Government report, published yesterday, has warned.
The document - a progress report on the implementation of the official strategy for the development of the international financial services industry in Ireland - said there was a risk that the current shortage of office space could lead to a dispersal of activity to the fringes of Dublin.
It highlighted the fact that developments at Spencer Dock and George's Quay had been blocked by planning objections and said an earlier start to the provision of space at Spencer Dock now seemed "unlikely".
A 12-acre extension to the original IFSC, which is currently under development, is already 50 per cent occupied, the report notes. More than 8,500 people are employed at the IFSC, an increase of 2,000 on the figure at the beginning of 1999.
However, the availability of the Section 25 accelerated planning process at Grand Canal Dock and Sir John Rogerson's Quay will ensure an "expeditious development" of the Dockland Development Authority's plans, says the report. These plans would increase office space capacity by more than 1,000,000 sq ft. They will be marketed this month with a view to starting construction in February 2001. This increase will be accompanied by a new planning scheme process for the extended Custom House Docks. This should accelerate development opportunities for the IFSC, the report adds. The report says IDA Ireland is considering giving grant aid to back-office regulated financial services in regional locations. However, this will not be extended to front-office activity, which will continue to be focused on the docklands hub, it adds. The report notes that IFSC-based companies grew strongly in 1999, with funds authorised by the Central Bank up to end-October 1999 estimated at almost €126 billion, an increase of 77 per cent over December 1998.
Meanwhile, a package of tax and company law measures, announced in 1999, is proving an effective deterrent to Irish-registered non-resident companies, according to the report. Incorporation figures for 1999 fell to 19,144, down more than 3,000 on the 1998 figure. The report also highlights the continuing shortage of skilled labour.
