July 2006

Developer has faith in ‘buoyant’ office sector

The developer of a new 125-acre business park in west Dublin believes that demand is still strong for new commercial and industrial space, despite worsening economic conditions. David Agar of Profile Properties, the firm behind Profile Park in Grangecastle, said that demand for office space in Dublin remains strong from indigenous firms and that there are strong prospects for multinationals, particularly from Britain, choosing Dublin as a new location. Profile Park will include industrial space, offices, a retail sector, a 200-bed hotel, a gym and a proposed motor park and will have a total of over 300,000 square metres of new commercial space. Agar estimated that total development costs will be in the region of €700 million, but the end value of the project would be near €1 billion. Profile Properties acquired much of the land parcel in 1998 when it developed the nearby Kilcarbery Park. It later sold a 39-acre section of the site to Collen Construction for €35 million. Collen will act as a joint developer on the project and will be responsible for building the industrial part of the scheme, with Profile handling the remainder. Agar said that the final parcels of land were purchased last year for €15 million, bringing total land acquisition costs to €65 million, which was partially offset by the earlier sale of some of the land to Collen. According to Agar, Profile Properties is undeterred by the prospects of an economic downturn. ‘‘The downturn has been related to and led by the residential property market. The office market in the city centre and other places is still very buoyant,” he said. ‘‘We are dealing with a number of corporates who are relocating and amalgamating different parts of their business. Typically in the commercial end of the market you are dealing with people who have their funding organised and are moving ahead. We are dealing with in excess of 46,000 square metres of active office enquiries at the moment, typically from indigenous companies.” Multinationals are another target market and Agar sees particular opportunities in attracting business from Britain, where many firms are threatening to relocate for tax purposes following news of the Treasury’s intention to clamp down on profits from international subsidiaries.’ ‘‘We see that as an active target and we are proactively talking to British companies,” he said. Agar said he would even go as far as endeavour to approach the new Taoiseach Brian Cowen about the matter. ‘‘We will suggest that it would be prudent of him to welcome these companies, but that they should be taking a minimum amount of office space and creating a minimum amount of long term employment as well as a lot of short term construction employment,” he said. While no one can predict just how bad the economic climate will become over the next year or two, Agar believes that Profile Park is well positioned to weather the storm, given the nature of the project. ‘‘A certain amount of it will be speculatively built, but typically with this kind of business park it is built to order. Already most of the component parts are predesigned with end users or typical end users in mind,” he said. ‘‘Market prices will reflect the opportunity to relocate. A lot of our active interest is coming from areas like Cookstown in Tallaght, where the land has been rezoned for town centre use. There are a number of instances where they are getting between €5million and €7million an acre now for land along the Naas Road corridor, and we would be aiming to attract those people to land that is less than half that price.” The downturn is also presenting some upsides and Agar said that tenders for the construction of units at the park were coming in at between 6 and 8 per cent less than what they might have been a year ago. ‘‘That alone makes it easier for us to continue to move forward, and it makes it easier to make the sales price more competitive,” he said. Construction is due to commence on a number of parcels of land during the next couple of weeks and Profile is pegging the total development time at between three and five years. Sunday Business Post 11 May 2008

Return to News Headlines...