Tenant trouble for IDA could cost €40m

THE State could be exposed to losses of over €40 million if it cannot find tenants for properties it has leased.

The Industrial Development Authority (IDA), the Government agency responsible for securing overseas investment in Ireland, has 83 buildings on long-term lease, with a further two reserved.

Forty-five of the 83 buildings being leased are occupied, while another is in the process of being taken back by the landlord, according to the IDA.

The remaining 37 are vacant, however, and costing the State millions of euro each year.

All the vacant properties were secured on 35-year leases between 1983 and 1989, meaning they have between 12 to 18 years to run. The outstanding amount due on the leases is €41.2m.

If the IDA cannot find tenants between now and the time the leases expire, the State will have to bear that liability.

Adding to the cost is the fact that the IDA is liable for local authority rates on all vacant buildings.

Enterprise Minister Micheál Martin, responding to a recent parliamentary question on the issue from Fine Gael TD Phil Hogan, said: “It is hoped that a number of these properties might be occupied or redeveloped during the period, which would have the potential to reduce this possible amount.”

However, the IDA’s own figures throw doubt on just how many of the 37 properties will eventually be occupied.

The agency says that, on average, each property has been vacant for almost four years.

“The longest void is eight years on a small cluster unit in Waterford,” the IDA said in response to queries from this newspaper. “The shortest is six months on a factory in Dublin. The average is just short of four years.”

Mr Hogan said it was a cause for concern that in a period of strong economic growth, the IDA could not find occupants for the properties.