International investment in areas outside of Dublin is in response to real business optimism, not sentimentality and goodwill, Linesight Consultants’ Niall Greene tells Pádraig Hoare.
It was a readjustment for Niall Greene when he came back to Ireland, having spent eight years building business for Linesight Consultants in the Middle East — but his new challenge is one based on optimism and momentum for cities such as Cork.
Linesight is a multinational construction consultancy firm with more than 40 years’ experience, providing cost and general consultancy services to the construction industry.
The firm works with tier-one clients across a multitude of sectors including commercial, data centres, life sciences, high-tech industrial, residential, hospitality, healthcare and retail.
Mr Greene is regional director for Ireland, maintaining and developing growth at Linesight’s regional offices in Cork, Limerick, and Galway. According to him, the current optimism around cities such as Cork is not just one of sentimentality and goodwill, but is driving investment from abroad.
The more investment funds, multinationals, and foreign direct investors hear about the optimism for the likes of Cork, Limerick, and Galway, the more they will invest — it is business-driven, he said.
“I was running our Middle Eastern business for eight years and came back to Ireland as a business decision, because we have seen a lot of our clients, both local and international, begin to develop more and become more optimistic about the regional market, who would like to grow more in the regions outside of Dublin. We’ve just appointed another person to oversee our Cork business. We as a business are investing more in the Cork market.
“A lot of people are looking regionally, constantly looking for sites and opportunities in the regions. It is good because in the last few years, the focus has predominantly been in Dublin. They are now looking at Cork, Limerick, Galway, with hotels, student housing, and commercial offices predominant.
“Nothing has been developed in those sectors in the regional cities over the past decade. In Cork, we have American, Dutch, and UK players into the market.
“It’s not going to happen today or tomorrow, but when you can create optimism in the local market, that creates infectious enthusiasm.
“I don’t see American multinationals holding back on the pedal. They put massive research into their activities. If they saw instability at national or local level, they wouldn’t proceed. I would have to say as a business, we are not seeing negativity at all.
Coming back to the Irish business was almost like starting from scratch, such was the flatness of the market. But the last 18 months have been satisfying from a personal and business point of view, he added.
“There are a few major projects under NDAs [non-disclosure agreements] at the moment that are not in the public domain. Once they are made public, that encourages and gives the city a lift. I think it is very positive for Cork, and when foreign investors and FDI companies come in, it puts Cork more embedded on the global map.
Cork will be the second-largest English-speaking city in the EU following Brexit. Once two or three investors come in, their competitors want to follow suit — an ‘if it is good for them, it should be good for us’ kind of attitude.”
Such major investment can cause sustainability worries, but Mr Greene said he sees significant
differences in 2018 compared to before the crash. “I’m not an economist, but the big difference this time around for the Irish economy, I think, is that you have a diverse source of funding.
“Previously we were 100% focused on bank funding. Plus, I think there is a hell of a lot more due diligence into the funding this time. There are now a lot of the hard questions being asked before the purchase, as opposed to previously.”
With such investment come major challenges that need comprehensive responses, he said, pointing to the issues of housing and skills shortages.
Build-to-rent models popular on the continent could be one of the biggest elements of the housing shortage solution, he said.
Linesight’s research report last week found clear demographic drivers to the build-to-rent market, with 29.5% of Ireland’s population aged 25 to 44, one of the highest proportions in the EU, and the target age cohort for the model.
“The French and Germans will rent all their lives. Friends of mine have rented for almost 20 years in Germany. They rent a complete shell and fit it out. Build-to-rent is a way to go, but still has a lot to be ironed out,” he said.
The housing data has improved in the first half of 2018, but there is a long way to go, Mr Greene said.
“It is a major challenge in terms of delivery. Inflation is a major issue for the industry at the moment. There are challenges, in terms of increased costs, and the Government needs to step in to help minimise costs, and ensure that it doesn’t become unaffordable for the punter to go out and buy the house.”