On Thursday the 11th, the Lisney seminar, ‘Building Tomorrow’, brought together leading minds in the property market. The seminar was created to assess the state of the Irish property market with a focus on planning and the future of the market.
By all accounts, the panellists agreed that Ireland is uniquely well-positioned to face the threats posed by Brexit and global political uncertainty.
Opening the breakfast seminar was Fergal O’Brien, the chief economist at IBEC, and he emphasised the solidity of the Irish economy.
“When the crisis hit Ireland in 2008/2009 there was a sense that our economy was built on selling houses to one another. That was undoubtedly a factor in the crash but in IBEC we could see that our core economy in terms of exports was spectacularly strong”.
“In the medium-to-long-term, the growth rate in Ireland will be double the European average. That’s based on our remarkably strong birth-rate which continued even through the worst of the crash”.
“That means that we can face the challenges of Brexit from a strong position. In overall terms, Brexit is a net negative for the Irish economy and we need the UK to come out of this in good shape. But our fundamentals are solid.”
O’Brien said that there is a crucial need for infrastructure development to be implemented by the government and that it is the main challenge facing the Irish economy at the minute.
“We’ve got a population that is growing faster than any other country in Europe but we’ve got the lowest level of capital investment spend of any country in Europe. We are a wealthy country; we should not accept the infrastructure development of a developing country.”
Frank Mc Sharry
Frank McSharry, divisional director at Lisney, echoed some of Philips’ concerns about housing in Ireland.
“You look at the coverage lately and you see queues just to see developments in Baldoyle and Portmarnock. And then we had the case just last week of Clonskeagh where the entire development sold out over the course of just one weekend. That’s unsustainable and highlights the need for new developments and new thinking about the type of developments too. At the current rate, it will take years before we get the supply side of things right when it comes to residential property.
“We need higher density developments and we need to start looking seriously at high-rise. We have 1,500 emigrants returning home every week and a lot of them are used to the idea of apartment living.”
McSharry reiterated the thoughts of Fergal O’Brien in saying that there is a drastic need for improved infrastructure throughout Ireland but especially in Dublin.
“There is a huge need for infrastructure development in Dublin,” he said. “Dublin is the 15th most congested city in the world. We need rapid investment in transport to service the new areas people are going to be living in.”
Of course, it’s not just infrastructure that needs to be improved. Tom Phillips, a planning consultant and urban planner, cited a study that shows the average time for a planning application for a development with more than 100 units in Ireland as 81.7 weeks.
“That’s over a year and a half,” he said. “The new fast-track process will reduce that down to 25 weeks which is a step in the right direction at last.
“Local authorities need to learn how to take risks again. If you look at the history of Ireland, an awful lot of the housing supply traditionally came from the local authorities. Even in the 1960s and 70s, they were building houses when there was no money in the country but around the year 2000, local authorities in Ireland just handed over that responsibility to private developers.
“The skillset that used to exist in local authorities of taking on a project for themselves and learning how to manage risk has just gone now because the people who were doing that have retired or moved on. We need to get back to that to solve the current housing crisis.”
Paul Hipwell is a divisional director at Lisney and he said that, in general, the Dublin office rental market is “approaching a healthy balance” as supply catches up with demand. There is lots of activity in terms of office space being built but over 40% of what is under construction is already taken before construction completes on the accommodation.
He said that Brexit will have an impact on office space in Dublin with JP Morgan, Morgan Stanley, Barclays and other banking giants, currently based in London, actively looking at office space in Dublin.
Hipwell said that it was no coincidence that the three of the top 5 biggest deals on buildings currently under construction were in the IT sector, namely Microsoft in Leopardstown, Facebook in East Wall and Amazon on the Burlington Road.
“Over the last 10 years, IT companies have taken an average of 30 percent of the available office space in Ireland,” he said. “The first generation of tech companies that came to Ireland were based in the suburbs like Microsoft and Salesforce in Sandyford.”
“The current generation like Google and Facebook were city-based but we could be getting to a situation where some city based tech companies will at least need some presence in the suburbs, if not a relocation move back to the suburbs. There are ‘techies’ getting grey and have to juggle school runs with work. That could be the next trend.”
Rounding up the seminar was Jonathan McCrea, an award-winning broadcaster and journalist, who spoke to the assembled crowd about his findings from travelling to China for his television show The Great Guide to the Future.
In agreement with Frank McSharry, McCrea also called for Ireland to consider high-rise buildings, though he framed his learnings against the story of his first experience with skyscrapers.
“I always wondered why there are no skyscrapers in Dublin. When I was a kid, my dad had a really cool job. He was a pilot – remember that was in the good old days when kids could just amble into a cockpit – and I remember flying into Chicago’s O’Hare airport with him. Chicago is the home of the skyscraper and I remember thinking they were the coolest thing in the world. Then flying back into Dublin and it was so flat and spread out. It was such a disappointment.”
McCrea travelled around China while making The Great Guide to the Future and he was astonished by the efficiency he encountered. He met Chairman Zhang – who invented a way of building a flat-pack skyscraper. Zhang’s signature piece – the 57-storey J57 or Mini Sky City in Changsha – was built in 17 days.
To put that in context with Tom Phillips’ earlier point, Zhang could have built 33 57-storey skyscrapers in the time it takes a planning application for an Irish project of 100 houses to even get to the approval stage.
According to the new planning framework, we’ve got 23 years to make a new Dublin. The work starts here.