Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

The house price issue will have to be directed to another Minister, but I can deal with the issue the Deputy inquired about on the commercial property sector. The Central Bank noted that 2013 saw the largest investment in commercial property since 2007, at €1.8 billion, with 60% in the office market, and that investment activity has remained strong into 2014. The growth in demand for office accommodation in particular is due in part to our continued success in attracting new foreign direct investment and the recovery in the economy more generally.

The availability of cost-effective and flexible property solutions continues to play a key role in supporting the delivery of FDI into Ireland. Many recent investments won, including West Pharma in Waterford, LinkedIn and Novartis in Dublin, Apple in Cork, Regeneron in Limerick, Jazz and Alexion Pharmaceuticals in Athlone and eBay and Paypal in Dundalk, among others, had significant property and infrastructural requirements that were a key component of their business case and rationale for investing in Ireland.

In the larger urban centres, the availability and supply of grade A office accommodation is a challenge in an environment of ongoing demand, particularly from FDI, diminishing availability and a lack of substantial speculative development. These issues have led to rental inflation in Dublin, Galway and Limerick during 2014, with prime rents relatively stable in the Cork market.

The autumn review of the Irish office market by DTZ Sherry Fitzgerald estimates that the current office vacancy rates range from 11.8% in Galway, 14% in Dublin and 18% in Cork to 20.5% in Limerick. In terms of new construction of office accommodation, DTZ estimates that 8,500 sq. m of office space is under construction in Galway and 16,000 sq. m in Cork, while in Limerick, 13,300 sq. m is under construction, and in Dublin an estimated 22,500 sq. m is under construction. The agencies of my Department, particularly IDA Ireland, are in continuous dialogue with key stakeholders in the property market to ensure the required competitive property solutions are available in the short and medium term.

While the office market nationally is leading the way in terms of recovery, with overseas investors such as Kennedy Wilson and Blackstone and the likes of NAMA investing in substantial commercial developments across the country - for example, the Dublin strategic development zone, Bolands Mills, and Albert Quay in Cork - there are also significant opportunities to refurbish older buildings nationally, which could increase the supply of commercial stock suitable for FDI and allow us to maintain competitiveness over time.

Additional information not given on the floor of the House

In May 2014, the Government published Construction 2020 – a Strategy for a Renewed Construction Sector, which contained a detailed programme of work, including 75 time-bound actions across a range of issues including housing, the planning process, availability of financing, monitoring and regulating the sector, and ensuring that we have a highly skilled workforce and opportunities for construction jobseekers. The latest data from the CSO shows a significant recovery in construction employment as the sector responds to an upturn in demand.

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