Government facing calls to strip OPW of property management function

The OPW has been renting the 180,000sq ft Distillers Building in Smithfield, Dublin, at a cost of €8m a year since April of this year.

The Government is facing calls for the OPW to be stripped of its property management function after it emerged the agency is paying €12m to rent a building in north Dublin that will remain vacant for at least 18 months.

The OPW, which has responsibility for managing the State’s property portfolio, has been renting the 180,000sq ft Distillers Building in Smithfield at a cost of €8m a year since April of this year.

Tenants are not due to occupy the building until the third quarter of 2025, meaning up to €12m will have been paid in rent before the property is even occupied. 

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A fit-out of the building is to be completed before tenants move in, the Dáil Public Accounts Committee was told on Tuesday.

Under questioning from Sinn Féin’s Mairéad Farrell, the OPW’s head of estate management Cathleen Morrison said the Smithfield building was “not occupied at the moment”.

“It’s quite a significant building,” Ms Morrison said, adding the property, when finished, will be home to Taillte Éireann — a new State agency comprising the former Property Registration Authority, the Valuation Office, and Ordnance Survey Ireland — and the Chief State Solicitors Office, with space allocated for 1,000 workstations.

Ms Farrell described the empty Distillers building as “just the latest wastage that we see”, adding she did not see “the OPW reforming itself from within”.

She suggested its property management responsibilities could be handed over to a commercial State-owned enterprise or a new agency to manage the State’s property assets.

It previously emerged a rent-free period on the building had expired amid wrangles involving the State agencies due to become tenants.

Regarding the delay of occupancy, the OPW had said it had "experienced significant delays in agreeing client and design requirements”.

Labour senator Marie Sherlock previously asked at the finance committee how such an enormous lease could be entered into without "a very clear idea of how the building is used”. 

OPW chairman John Conlon replied the amalgamation of the State bodies created difficulties in organising the fit-out of the building.

“That has created significant challenges for us in that space,” he said. “Because of the delay in amalgamating those bodies, our design requirements need input from clients. That took time.”

OPW spending

It is not the first time the OPW has paid high rents for an empty building. 

In September 2018, it emerged just under €16m was paid to rent Miesian Plaza, headquarters of the Department of Health, over a period of 17 months while the building lay empty.

It is understood two floors at Bishop’s Square in south Dublin, which the OPW leased in 2019, lay vacant for several years at a cost of more than €5m.

The OPW has come in for sustained criticism in recent months over the level of value for money it has been achieving on taxpayer-funded projects.

It had not responded to detailed questions regarding the Distillers Building lease at the time of publication. 

It is understood, however, that the agency signed up to a pre-let of the building in April 2019.