Sell-off of state property assets 'aspirational'

A REPORT DEALING with the planned sale of public-sector property assets across Europe says that the Irish Government’s objectives are “mainly aspirational and designed to provide a framework for identifying and evaluating different courses of action”.

Marie Hunt, executive director of research at CBRE in Dublin, said the Public Service Reform Plan published last November had the twin intentions to dispose of property and achieve better management of the government estate.

With staff numbers dropping, there was great emphasis on improving the usage efficiency of the existing estate, for instance by restricting lease and maintenance arrangements.

It was also intended to manage down the physical footprint of the estate. “Thus, although there has been no outright property sales to date, it is likely that there will be attempts to dispose of surplus property assets from 2012 onwards.”

More generally, the CBRE report said that because of the continuing need to improve the state of public finances in many countries, there was a well established appetite to raise capital from the sale or development of public property assets.

Activity had so far been highly concentrated in a small number of countries, and shifts in the pattern of investment demand across Europe suggested that executing large-scale disposal programmes would be challenging in some markets.

There was a clear need for sellers to assess the likely investment appeal of the assets in question and to consider a range of approaches including phased disposal or partnership arrangements.

Meanwhile, Hunt told the Northern Ireland Assembly’s Business Trust that occupancy costs in the North were at least 50 per cent lower than those prevailing in the Republic.

Wage costs and house prices were also considerably lower, but the many competitive advantages would only be full capitalised on if there was a reduction in the rate of corporation tax in Northern Ireland.

Only 13 per cent of office take up in Belfast last year emanated from US companies, compared to 38 per cent of the Dublin market.

According to CBRE, ensuring that Northern Ireland obtained autonomy to set its own corporation tax rate and the promotion of enterprise zones had the potential to boost much needed foreign direct investment, reduce the traditional reliance on the public sector and create jobs in the region. Grow NI had said that a reduction in the corporate tax rate had the potential to create 50,000 new jobs.