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Lack of supply of Grade A Offices beginning to bite
By Ruth Baily
The housing supply shortage is front page news at the moment. Rising house prices, rising rents and the numbers of people now homeless for the first time are making the headlines. We know that the only way to solve this problem is to build more homes.
But the construction industry does not just build houses. Everything that surrounds us is created by the industry. The homes we live in, our schools, work places, roads, hospitals and places of leisure and entertainment. Construction impacts on every aspect of our lives. It is a hugely important driver of economic growth. The industry is a very large employer and has the potential to grow jobs both directly and indirectly.
Many of us remember a time when the IDA built advance factories across the country in order to attract foreign direct investment. In the eighties when we last experienced economic woes much of the investment came from Europe. Now we are attracting hi-tech industries who require Grade A commercial offices from where to operate their global empires. In a high tech world these offices and jobs can be located anywhere.
Currently they are locating in Ireland for a combination of factors. Our educated workforce, a stable political climate, access to technology, EU membership and our tax regime are all part of the decision making process. However if we cannot find office space in which to locate new companies, then the rest is irrelevant.
The current return to growth in the economy is very welcome but we are now beginning to see shortages in areas other than housing. During the downturn large scale office and commercial construction stalled. We now need to ramp up building on this front in order to have the kinds of office accommodation available to continue to attract new jobs to Ireland. If we do not have appropriate accommodation on tap we risk losing these jobs to other jurisdictions.
Many of the same barriers to build that exist for home building exist when it comes to office and commercial construction. The most pressing of which is access to finance. Few, if any company who has survived the down turn has access to cash reserves. A mechanism needs to be found urgently to allow funding for development, particularly as office and commercial development directly impacts our ability to attract investment.
Planning is a major issue. Dublin Docklands has been designated a Strategic Development Zone (SDZ). Ideally this should speed up the planning process and allow faster turnaround time from application to the granting of permission. This is welcome, however there needs to be further designation of SDZ’s both in the greater Dublin area and throughout the country in the larger urban areas. This will help to spread the network of new organisations coming into the country, new jobs and the economic growth.
With many other countries biting at our heels for FDI, it would be a major worry if we were to lose potential jobs because we were unable to provide adequate office accommodation. We need to tackle the barriers to build now before this scenario presents itself.