Potential for global property financing identified

IRELAND COULD develop as a global centre of excellence for property financing, John Moran, secretary general at the Department of Finance, said yesterday.

Drawing on Ireland’s success as a centre for aviation finance, Mr Moran told the Society of Chartered Surveyors’ conference in Dublin that achieving such an ambition “was not beyond the realms of possibility”.

Noting that if the construction sector wanted to grow more than the 8-10 per cent of GDP that would be economically viable, it would have to look overseas rather than repeat past mistakes when it grew to 20 per cent of GDP.

“If you want to grow the sector beyond that, then you need to do that in the international economy,” he said, adding that Ireland could become a hub for the development and financing of global real estate.

Minister of State at the Department of Public Expenditure and Reform Brian Hayes said there was a need for a “clear long-term policy” on which departmental functions needed to be based in Dublin’s city centre.

“The old ways of providing public sector office space – and indeed utilising that space – have to change,” he said. The cost of office accommodation is the Government’s third biggest administrative overhead, after pay and pensions, and the Minister committed to reducing the State’s annual rental bill to €100 million by 2015, down from €131 million in 2009. This will involve “rationalisation of the existing portfolio, rent reductions and disposals”.

Patrick Tuttle, chief executive of the Australian group Pepper, which acquired the Irish mortgage business of GE Capital in June, urged Irish banks “to take some losses to move the economy on”.

“A balance needs to be struck between debt forgiveness, bank capital requirements, moral hazard, and the genuine need to release borrowers from the ‘debt prison’ that their family home has become, said Mr Tuttle.