Developers weigh up opportunities for Ireland following UK Brexit decision
Published 03/07/2016 | 02:30
It's been just over a week and already Brexit has firmly entered the lexicon as the quintessential byword for uncertainty.
But the unprecedented difficulty the UK faces as a result of its decision to leave the EU may shortly present an extraordinary opportunity for Ireland, and for Dublin particularly, according to the country's major property developers, four of whom spoke with the Sunday Independent.
While Michael O'Flynn readily conceded that the uncertainty caused by Brexit was something that nobody in business wanted to see, he believes there will be short-term benefits for Ireland's construction sector as a result of UK-based companies seeking to retain an EU presence by relocating here.
"One doesn't want to get ahead of oneself, but in my opinion there will be a spillover effect for us," he said, while cautioning that Ireland is already facing its own challenges in meeting existing demand for commercial and residential space.
"The fact that there might be further demand in the short-term for that commercial and residential space could create a difficulty."
Asked where the opportunities might come from in terms of the UK, Mr O'Flynn believes they will flow predominantly from London as opposed to the regions, or Northern Ireland and Scotland.
"I do think a lot of companies based in London now will need a Euro base. Dublin is well-placed for that because it's English-speaking and there is a healthy out-turn of university graduates, which makes it attractive," he said.
The O'Flynn Group chief says that while the IDA has done a "great job" for the country in attracting inward investment, the agency now had to "go into overdrive" to ensure the negative impact of Brexit on Ireland will be offset by some of the gains we could get by virtue of our location.
He also called on newly- appointed Housing Minister Simon Coveney to factor the consequences of the Brexit decision into his action plan for housing.
"Even if we have the offices to accommodate the workers, we certainly won't be able to satisfy the rental accommodation requirements," said Mr O'Flynn.
"I think Minister Coveney's problem has just become a bigger one. Thankfully, the problem has come within his first 100 days, so that gives him the opportunity to be even more ambitious now so Ireland will at least be in a position to take up the opp- ortunities that might come our way.
"Uncertainty is challenging, but it also brings opportunity. I think Ireland needs to be ready for the short and possibly even medium-term opportunities that could come out of this. But it's up to the Government to do that."
Luke Comer of the Comer Group knows an opportunity when he sees one, having snapped up the former UCD Veterinary College in Ballsbridge for €22m (a fraction of its boom-time sale price of €171m) in 2013. However, like Mr O'Flynn, he is wary of predicting the potential benefits or consequences of Brexit for Ireland.
"I think Brexit for Ireland could bring as much bad as it brings good," he said, "but like everything else, I never try to predict what's going to happen because it's something that's never happened before."
The Galway-born builder can see the possibilities for Dublin, however, should banks in the City of London insist on having their base within the Eurozone following the UK's departure from the EU.
"You would expect it would be very good for Dublin if any of the big banks in London decide to move to be in Europe," he said.
"They could look at Frankfurt and ask, 'Do we need to be in Frankfurt where we have a language issue, or can we just go to Dublin where we can operate in the very heart of Europe using the English language?' Ireland is one of the strongest members of the EU. I think they might say, 'We'll go to Dublin'. I think you'll have a lot more of that because it doesn't look like there's going to be a reversal [of Brexit], does it?"
Belfast-born property investor Paddy McKillen is conscious of the uncertainty caused by the UK's decision, but is adamant Ireland needs to be prepared to accommodate international businesses and financial institutions seeking an EU foothold.
"There has to be a positive there for Ireland. If an American or Asian company or bank wants to launch into Europe from an English-speaking base, then Ireland's the place. We need to step up our welcome," he said.
Johnny Ronan and his company, Ronan Group Real Estate (RGRE), believe it will be months before there is clarity on the consequences of Brexit for the UK, the EU and for Ireland.
Guy Leech, former group finance director at Ronan's Treasury Holdings and a key adviser to the developer, is clear, however, on the possibilities that could yet present themselves.
"Ireland's status as the only remaining English-speaking EU country with a favourable corporate tax regime, a skilled labour force and a welcoming FDI environment should enable it to compete strongly for new investment and corporate tenants," he said.
Referring to RGRE's capacity to meet that potential demand, he added: "In Dublin, Ronan Group Real Estate has a pipeline of more than one million square feet of Grade-A offices to build in prime locations and looks forward to working with the IDA and others to encourage employers to expand in Dublin and to move there."