SEVERAL major office developments are being located in traditional industrial estates because of the shortage and the high cost of suitable office sites in the city centre of Dublin.

The increasing popularity of industrial estates for operations such as tele marketing data processing and computer software development is forcing a significant change in planning policy.

Office buildings per se are not permitted in industrial zones. However the increase in the number of large multinationals setting up projects in Ireland means that finding suitable office sites is becoming a major a problem. Many of these companies in tele-services or computing need two or three storey buildings convenient to airports and labour supply.

IBM, for example, located a customer support operation in Ballycoolin, near Blanchardstown, Dublin 15, in a 40,000 square foot IDA advance warehouse unit. The building was completely refitted and a new roof put on it. Other firms have moved to the southside of the city where they occupy warehouses which have been substantially upgraded.

The situation is further exacerbated by the low volume of vacant office space in Dublin now around 4 per cent of the total the lowest level for many years.

Estate agents say that even where full planning permission has been granted, it can take at least nine months, sometimes up to IS months, to develop new offices.

"What some companies are doing is finding warehouse units and converting them to quasi offices," explains one agent. "It can take two to three months, but is a lot quicker and cheaper than a new, purpose built office block."

Accommodation in new city centre office blocks can cost up £18 per square foot, about 40 per cent more than most of the low cost foreign companies are prepared to pay. Warehouse type accommodation, even when upgraded, can be found at between £6 and £10 per square foot.

In the new generation of industrial/office parks, such as East Point and Citywest, rents are about £12 per square foot.

"Although companies spend a lot of money fitting out the industrial units, it is still far cheaper," says one agent.

"I think planners have adopted a very flexible and positive attitude in interpreting existing development plan rules to allow this type of use in office type buildings in industrial zoned land," says Paul McNeive of Hamilton Osborne King.

James Meagher of Sherry FitzGerald says industry has become virtually all high-tech, whereas traditional industrial estates all had manufacturing projects. He cites as an example Sandyford Industrial Estate, on Dublin's southside, where there is a strong high tech occupancy rate.

"Years ago, companies had their head office in town, with their warehousing and manufacturing operations elsewhere," he says. "Nowadays, everything is under one roof, so there are no dual costs."

He says companies are naturally gravitating to the industrial estates because there are very few opportunities for developing new office blocks in the city.

These companies were well aware of the problems associated with the city centre, including traffic congestion and the difficulty of providing car parking for workers.

It makes a lot more sense to locate outside the city centre, where they can expand more easily," says Mr Meagher.

Agents say businesses do not care whether they are in Tallaght or Swords being near good road networks and population centres to attract staff, is what counts. However, the northside of Dublin has problems with its sewage capacity.

"If you put in a 1,000 job project in Swords, that's going to create quite an added strain on the system," says one agent.

Planners and developers believe development in the Fingal area will be restricted until the problem is resolved.

"There has been a definite blurring of the lines, regarding planning," says Dermot Pierce, managing director of Earlsfort Centre Developments, which is handling East Point Business Park in the Dublin docklands.

"The old days of heavy industry are gone. People now produce things in office type buildings," he says.

East Point, which will soon have its own DART station, boasts an impressive line up of tenants, including AOL Bertelsmann, Kindle and Sun Microsystems.

The new generation of industrial parks feature buildings and facilities of much higher specifications than heretofore. Dermot Pierce says to attract staff, employers must provide a good working environment and a broad range of services.

"We provide space at an economic rate, because industry of that nature needs space of quality at a particular price," he says.

Around 2,000 people work in East Point, and this will rise to around 5,000 in the next three years.

East Point is zoned industrial and planners have inserted a specific user clause on planning applications. This device means that the planning authorities have to approve the business which will occupy a particular building, before final approval is given.

Some property observers say there seems to be an unwritten understanding that IDA approved projects will be accommodated in industrial estates because of the jobs they create. In some cases, the planners insisted on a minimum manufacturing content, in others it was not required.

IT has not gone unnoticed that UPS, the international parcel delivery group, was granted permission to set up in a 40,000 square foot unit in Ballymount Industrial Estate, the first such project on the estate.

However, another similar application was rejected.

"In both cases, the intention for usage was the same," according to a source.

Dermot Pierce says industry has moved so fast and so suddenly that planning regulations are lagging behind. However, he says the planning system is reasonably flexible. "They have to carry out a balancing act, balancing the needs of the city centre with the rest of the county," he says.

Others say planners will have to take a far more flexible approach, that as industry is evolving, the demands for different types of space will have to be met. According to the IDA which has won 42 major tele-services projects over the past three years, the demand for space is set to continue. Many of the companies already located in Ireland are setting up back office administration projects creating more employment and placing additional demands on space.

The IDA believes that as space in Dublin city and county dwindles, an increasing number of firms will locate in neighbouring counties, which is in line with IDA policy.

However, one Dublin planner who told The Irish Times that planners are taking an increasingly lenient view of the usage of industrial sites, warns that it could have a serious effect on traffic flows.

He says that as more businesses locate close to the motorways, traffic will greatly increase on roads which were built to serve manufacturing and distribution type businesses.

"We have had a very good system up to now, but if we pour people on to the motorways, we are eventually going to have a problem."