IDA Ireland has denied the State is losing out on foreign investment because of a lack of grade A office space in Dublin. Chief executive Martin Shanahan insisted that while there was a “tightness” in the market, it was not undermining efforts to attract firms here.
He was speaking at the launch of the agency’s mid-year review which showed 110 IDA-backed projects had led to the creation of 9,000 jobs since January, up on the 100 investments and 8,000 jobs generated during the same period last year.
However, Dublin’s attempt to position itself as one of Europe’s premier tech hubs has been undermined by the shortage of top quality office space. Just 1.8 per cent of the city’s total grade A office space in Dublin 2 and Dublin 4 was available to rent at the end of the first quarter of this year, data from property firm CBRE shows.
Mr Shanahan said approximately 1.8 million square feet of prime office build was due to come on stream in Dublin’s central business district over the next 18-24 months. “The availability of property solutions is something we’re heavily involved in and work very closely with our clients on.”
Mr Shanahan also noted that while office rents in central Dublin had risen considerably, “there was still a lot of value to be had” in other parts of the city. “We would like to see a situation where there is a reasonably stable supply of property as opposed to the pendulum swinging one direction and then the other.”
The IDA said Ireland was continuing to command a “strong share” of global investment for Dublin and the regions despite intense competition and economic uncertainty in Europe.
Among the big global brands to announce expansion plans here so far this year was Apple, which is investing €850 million on a new data centre in Athenry, Galway, creating 300 new jobs in the process. Healthcare giants Alexion, Johnson & Johnson and DePuy have also announced big investments for Dublin, Limerick and Cork. The clustering of high-tech firms in Dublin’s docklands is also continuing, the IDA said, noting the recent arrival of online fashion label Zalando and digital messaging firm Slack.
Mr Shanahan said the most noticeable feature of the review was the large number of investments going outside Dublin. Currently, he added, 59 per cent of employment in IDA companies was outside Dublin. The IDA was at the beginning of a five-year strategy which placed winning investments for regional locations at its core.
Mr Shanahan confirmed that 70 per cent of the foreign investment flowing into Ireland was coming from North America, with 20 per cent coming from Europe and the remainder from emerging markets.
On recent moves by Britain to bring its corporate tax nearer to Ireland’s 12.5 per cent rate, Mr Shanahan said competitors were “always making changes to their offering”. However, he said Ireland boasted significant research and development tax credits and would soon have knowledge development box.
Minister for Jobs and Enterprise Richard Bruton said: “Of particular importance to our jobs strategy is accelerating the rate of job-creation in every region of the country. While unemployment has fallen in every region, and many areas with historically high joblessness are now growing jobs rapidly, some regions are growing faster than others.”
He noted that half the investment announced this year had come from first-time investors, with the remainder represented by expansions or transformations by existing companies.
