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Published in Industry on 03/02/2017

Top Construction & Property Stories of the Week: 10at10

#10at10 #newsroundup

CNI Editor reports

Some of the most noteworthy construction stories from the last week, as compiled by the team at Construction Network Ireland.

(Have a story you think should be covered? Contact editor@constructionnetworkireland.com)

1.

Ireland’s infrastructure network, including the long vaunted Metro between Dublin Airport and Dublin City, is to get a spending boost from the exchequer to the tune of €2.6 billion in an attempt to mitigate the effects of Brexit.

On Tuesday Minister for Public Expenditure Pascal Donohoe and Minister for Finance Michael Noonan announced that roads, ports and airports were to get a spending boost to help make the states economy more robust and more likely to survive a Brexit scenario.

Some of the pieces of infrastructure under consideration for a spending boost in order to speed up their delivery will be the Metro North light rail, and the second runway at Dublin Airport.

Minister for Finance Michael Noonan also said that he is in discussions with the European Investment Bank in order to secure more funding which can be held off the state’s balance sheet and therefore will not affect Ireland’s government debt.

2.

Gannon Homes has been given the go ahead to convert the historic ruin at Belcamp Hall in North Dublin into 34 apartments, and to develop a further 122 two-story houses and a number of apartments in the grounds of the former mansion, along with a restaurant and childcare facility. 

Fingal County Council has granted the permission with 53 clauses and it is believed that there is to be a separate application for apartment blocks on the site, adjacent to the Malahide Road.

Belcamp house was designed by James Hoban, the architect who designed the White House in Washington DC (then a brand new city created as the new country’s capital) following a public competition. It was a private house initially and later became a boarding school before being bought by Gannon in 2004 for €105 million.

3.

Construction levels in Belfast are believed to be at their highest levels in almost a decade, according to a report by Deloitte Real Estate.

The report finds that more than 30 developments are under construction or recently completed, including 8 new hotels, 6 office developments, along with student accommodation and educational facilities.

4.

Home building increased by more than 30% in Ireland during 2016 according to statistics released by the Construction Industry Federation.

The figures show that 5,626 residential units commenced in 2016, a 31% increase on 2015 figures.

While the figures are a significant increase and encouraging news following years of inaction, they are still a fraction of the units needed to fulfill demand.

5.

If there are more homes built during 2017, and by all accounts it looks like there will, the prices they fetch on the open market will increase by at least 5%, according to ratings agency Moody’s.

The agency launched a report into the Irish housing and mortgage market on Monday, which shows that mortgage arrears are receding, but which speculates that repossessions are going to increase before the market settles down.

6.

It is not often that politicians talk straight, but that rarest of things happened this week at the launch of a government plan in Maynooth University, where Enda Kenny admitted that the government is not prepared or capable of meeting the “massive infrastructural requirements” of the state or to make balanced regional development a possibility.

Our population is rising. Demand for rehabilitative places, hospitals, hospices, schools, third-level… these are massive infrastructural requirements over the next 30 years and we’re not geared for that now”, he said.

The Taoiseach was speaking at the launch of a public consultation on the long-term infrastructure development in the state, aimed at balanced development and counteracting the sprawl of Dublin and the creation of endless commuter towns.

The report highlights that Dublin now stretches into 11 counties and accounts for almost a half of the economic activity in the state.

If the state is to function properly, this needs to change and there needs to be a greater focus on development in cities such as Cork, Limerick, Sligo and Galway, coupled with infrastructure such as high-speed broadband which would allow sustainable economic activity in rural Ireland to become a possibility.

Full details on the public consultation can be found at npf.ie/ (National Planning Framework).

7.

The cheeky chappies at NAMA paid €158 million in preliminary tax following a move by the government to close off section 110 tax loopholes, according to a report in the Irish Times.

It emerged last year that some overseas investors – commonly referred to as ‘vulture funds’ by their closest friends – were using some very legal means to minimise their investments in Ireland.

Some opposition TD’s were apoplectic when it emerged that some of NAMA’s loans had also used these structures for some loans, even though the money generated by NAMA (in theory at least) essentially goes back to the state.

8.

Mortgage draw downs in Ireland grew by 15% last year and further growth is expected in 2017 according to statistics from the Irish Banking and Payments Fereration.

Draw downs rose to €5.7 billion in 2016, up from €4.9 billion in 2015 with the largest increase shown in the final quarter, indicating that the government’s first-time buyer incentive may be having an effect.

9.

It’s hard to believe it has been a year, but the Irish Times ‘Crane Watch’ is officially a year old. What began as a bit of a wheeze by the newspaper seems to have actually become ‘a thing’.

What has happened in that year? The number of cranes has increased by 76%, from 34 to 60; the vast majority of cranes are still located on the south side (a whopping 52 of the 60 cranes), with the highest density on the south docks.

We were sceptical when the crane watch series launched, but consider us converted.

And finally…

10.

We wrote last week of the growing Irish whiskey market and the surge of new whiskey brands and new whiskey distilleries. The growth of Irish whiskey sales is something this reporter has been tracking for quite some time, and wrote about for the first time five years ago.

It’s not just boutique whiskey brands and whiskey drinking journalists who are aware of this boom in Irish whiskey though, and this week drinks behemoth Diageo announced it is to launch a premium Irish whiskey and build a new €25 million distillery on it’s St. James Gate home.

The new whiskey will be named ‘Roe & Co’ after the famous distiller of the same name. George Roe & Co was apparently one of the largest distillers of Irish whiskey in the world and distilled whiskey adjacent to the Guinness site for hundreds of years, until the company closed it’s doors in 1926.

The new distillery will open in 2019, subject to planning permission, and stock will need to be laid down for quite a few years after that until it has reached the required age to qualify as a whiskey (a minimum of three years, but in reality more).

Until that point Diageo will be buying whiskey from other distilleries in Ireland at a premium – the market for this sort of spirit has sky-rocketed over the past few years – and blending it to the required taste. The Irish whiskey market is an expensive market to break into and buying in stock like this is Diageo’s only option if they want to break into the market.

But wait! Didn’t Diageo own an Irish whiskey brand until 2014? One with big name recognition and a massive amount of already aged whiskey laid down?

That’s right, Diageo swapped Bushmills, purportedly the oldest whiskey brand in the world, for Tequila brand Don Julio in late 2014 and retained no stock. 

A large proportion of the stock that had been laid down in Bushmills was sold off at the time of the sale and has helped build the reputation of some of the hottest boutique whiskey labels on the market now while their own stock ages.

Apparently, it was only after Diageo sold off Bushmills – a move that was unpopular within the company – that company bigwigs thought about launching ‘Roe & Co’.

While the staff in Diageo are clearly top notch, the decision makers at the top of the business are the special brand of ‘bigly smart’ individuals usually found exclusively in the world of politics.