In the past month, a new commercial office block has been leased in Dublin at a price of €70 per square foot, writes Joe Gill.
This is an extraordinary price compared to the levels pertaining in the capital over the past eight years. It reflects a resurgence in business confidence colliding with the availability of new office developments.
I mention this important price point because it contrasts sharply with the commercial office costs that apply in Cork City.
Analysis shows that modern office space in Cork City is available at circa €20-€30 per square foot and it does beg the question as to why the large and widening gap?
The question is asked because Ireland is a very live issue in a variety of investor conversations internationally at present. Some of these are linked to the ongoing expansion of US-based multinationals that are adapting and adjusting to the Trump phenomenon.
Others are a slew of companies either in the UK or who were considering the UK as a location inside Europe before Brexit. Yet more are fast-developing Asian companies, particularly Chinese, who have been given an official stamp of approval to take Ireland seriously when internationalising.
For all of these I believe the key cities outside Dublin — being Cork, Limerick, and Galway — are increasingly attractive as alternatives to the capital for investment purposes and especially for companies that require office space for the future.
The first, and perhaps most important issue, is cost of establishment. The huge office rental cost gap is only matched by the very large difference in residential house prices between Cork and Dublin.
The employer — and employee — who sets up in Cork will operate in the same tax regime as his or her peer in Dublin.
He or she can use the same internet capacity in Cork as applies in Dublin to communicate anywhere in the world.
So why the slower pace of investment outside the capital?
The matter of connectivity is often brought up when comparing Cork with Dublin. Fewer flight connections, it is argued, work against Cork.
This line of thinking fails to understand the type of mobile investment being targeted. Many companies weighing up Ireland envisage the bulk of their staff being IT savvy, multilingual and hard working. The vast majority of them will not have to be flying in and out of the country each week. Rather, being available 24/7 on powerful video and audio broadband will satisfy the international needs of these employers. The regional cities in Ireland have the capacity to do all that.
Despite these advantages, I fear a bias exists in the institutional eco-system of Ireland towards the greater Dublin area.
This may be no more that the understandable bias that is linked to having key decision makers living in that region.
It may also be connected to the botched effort at decentralisation carried out more than a decade ago.
Whatever the reason, it is time to change the dynamic and have much greater political and policymaking energy applied to broadening the economic development agenda outside of Dublin.
Kind words do not suffice. There needs to be firm actions that deliver more projects into the regional cities.
Beyond that, a personal bee in my bonnet is the woeful inability to provide high- speed broadband across the country.
If that was achieved, it would unleash another valuable layer of geography that can be pitched to mobile investment as an even more cost competitive location to attract employees who value space and a rural environment.
Regional cities in Ireland, and rural locations behind them, offer a rich platform on which Ireland’s economic progress can be moved forward and even accelerated.
It will need, however, firm political leadership to advance the process.
I wonder who will pick up the cudgel on that?
Joe Gill is director of corporate broking with Goodbody Stockbrokers. His views are personal.
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