The importance of property in marketing FDI Farannan Tannam

Presentation content Diagram of the investment climate Target sectors Key attractions Best zones in Ireland Case study Hertz FDI investors –known unknowns! Investment facilitation through property Trends

Investment climate Infrastructure Knowledge/ Research Business Environment Legislative Policy Skills Communication

Some target sectors in Ireland Life Sciences (Pharmaceuticals, Biotech and Medical Tech.) Clean Technology Entertainment and media ICT Shared Service Centres Expansions of existing operations R&D

Key selling points Low Corporation tax (12.5%) EU membership Pro-business - all party political support for FDI Good reference sites Young well educated workforce Good place to live Good infrastructure and a range of property solutions Exceptional collaboration - joined up thinking

Property Solutions – key selling points A range of “investor ready” zones and available buildings throughout the country and other fall-back sites in private ownership identified and assessed High quality well planned and well managed industrial zones to accommodate target sectors Property provided by municipalities, private developers and IDA Ireland A large amount of vacant office space in Dublin (where rents have fallen by about 40% over the last 2 years) Delegations/procedures to ensure speed in decision making

The Best Zones in Ireland Municipality Private IDA Ireland

Grange Castle Dublin - How It Came About Municipality had a large land bank in a good location and wanted to create jobs and generate property taxes for itself An experienced zone consultant was hired Municipality provided high quality infrastructure and targeted major projects in conjunction with IDA Ireland Major investments secured - the largest bio-pharma plant in Europe from Wyeth (now Pfizer) and a Microsoft Data Centre Courageous step by municipality and highly successful

Galway

City West Dublin Private developers saw an opportunity to provide a high quality zone to cater for a wide range of clients, local and international who are seeking high quality buildings and surroundings Zones within zones for different requirements Well maintained with innovative master lease provisions Expensive location and high service charge Joint venture on part of site with IDA did not succeed

College Park - Best IDA Municipality owned site and sold part to new Technical College Entered into a joint venture with IDA Ireland on remainder of the land with IDA financing the provision of infrastructural works & sharing in the proceeds of land sales Only light manufacturing and internationally traded services permitted Has been slow, due of amount of property on market, the recession & increased focus on developing the poorer regions in Ireland - long term investment!

Customer Contact Centre Hertz Dublin

History Hertz wanted an immediate start-up so were allocated an available building on an IDA zone Purchased site from IDA at market value and built their own facility Near a large labour pool Initially basic European reservation call centre and attracted native language speakers from 29 different countries Expanded to become the European Service Centre for accounts and administration operations employing 1,000 people in head office functions (EMEA) such as HR and finance

Key factors Immediate availably of a building provided under a PPP arrangement between IDA and private developer Availability of a site at a set price for Hertz to build with expansion space Had no difficulty in attracting foreign language staff to Dublin – high quality of life Initially basic call/booking centre - good experience led to major expansion and taking on higher level functions Profit made by IDA on land sale financed other zones

FDI Investors - Known unknowns! Success rate in attracting future FDI Sectors and sub-sectors which will be attracted Location of investments Stage of development/type of buildings Size of sites and size of buildings Key - flexibility

Investment facilitation through property Substantial investment usually with no immediate return - time horizon perhaps 20/30 years By nature requires municipalities to be courageous Model of publicly owned investor ready sites and buildings does work all around the world Private property developers will follow FDI successes and will provide sites and buildings PPP for infrastructure on zones not the answer Successful zones are a result of team effort and joined up thinking

Trends Immediate availability – quick start up Quality of working place/attractive surroundings Image conscious Environmental awareness Good estate management and future zone strategy More “services” projects seeking office type buildings in (flexible buildings) Significant Implications for the future of older industrial zones

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