Business Park to be developed at Dublin Airport

Dublin Airport Authority (DAA) has unveiled plans for a major new business complex beside the airport, reports The Irish Times this morning.

A key 20-acre site directly in front of Terminal 2 will accommodate the first phase of a planned 70-acre business park aimed primarily at international high-tech companies involved in research and development as well as other service industries looking for ultra-modern offices.

The airport authority is currently in discussions with Fingal County Council on the preparation of a masterplan for the entire site, which is due to be published later this year.

This will facilitate the launch of the first stage of the business centre to be located in the area in front of Terminal 2 and extending to the land around the Aer Lingus head office. Commercial agent BNP Paribas Real Estate has been engaged to advise the airport authority on the development opportunities.

Extensive research by the DAA has convinced the authority to capitalise on the airport’s direct links with Europe (108 daily flights to London alone), North America and the Middle East.

The promoters are also convinced the airport campus can provide “the optimum working environment” in Dublin because of its information technology infrastructure, round-the-clock security, easy access to the main transport hubs, the wide range of fitness facilities, the choice of 31 restaurants, bars and coffee shops, and the fact there are 700 buses operating into and out of the airport on a daily basis.

DAA is also hoping to boost cargo traffic from Ireland to US markets by persuading the American authorities to introduce pre-customs clearance in Dublin in much the same way as it applies to passengers.

Ambitious plans

Another new strategy by the airport authority will see it supporting the development of the airline maintenance, repair and overhaul business through the establishment of an education and training centre in conjunction with the airlines and third-level institutions.

Hugh Madden, head of commercial revenue, told the Irish Times, that in spite of the decision by the aircraft maintenance firm SR Technologies to pull out of the airport in 2009 with a loss of 1,100 jobs, the DAA had managed to relet all the hangar space, with two of the buildings going to Dublin Aerospace and Eirtech Aviation.

The more ambitious plans by the DAA to broaden its revenue base through the development of a top-of-the-range business park comes after Manchester and Schiphol (Amsterdam) airports also signalled their intention to open up their campuses to commercial property tenants wanting to avail of the wide range of support services.

Even though it owns no less than 2,500 acres around the airport, the DAA’s development strategy for the first phase 20-acre centre was made possible through the purchase of the Aer Lingus head office and the adjoining 10 acres.

Marketing campaign

The €22.15 million deal included a cash payment of €10.5 million and the provision of a range of services in lieu of further payments as well as promotional facilities in Terminal 2.

The overall transaction also obliged the DAA to spend €3.9 million on the conversion and upgrading of the former personnel and catering building for use as an office by Aer Lingus.

The airline is due to move into the 2,500sq m (26,910sq ft) building before the end of the year. Its head office has already relocated to Hangar 6.

A decision on whether to demolish the dated six-storey office block built in 1970 or to refurbish it largely depends on whether the DAA manages to find a tenant as soon as Aer Lingus moves out.

In the meantime, a marketing campaign is likely to be launched for a Terminal 2-linked, four-star hotel with 470 bedrooms which has been given planning approval by An Bord Pleanála.

With most of the banks unwilling or unable to fund new property developments in the present economic climate, the DAA is still undecided as to how the new business park will be financed.

Katie O’Leary, commercial property manager, said the current plan was to look at various business models before proceeding with the project. The final shape of the park would depend on planning requirements, traffic constraints and market demand.

Her colleague, Maurice Hennessy, director, commercial, said funding had not been specifically set aside either to kickstart the project or carry out some of the developments.

They may well look for a partner or enter into a joint venture arrangement with another company but at this stage he would not rule out the possibility of the authority funding it.

Rent level

DAA reported a trading surplus of €30 million in 2011 and with overall passenger numbers up 2 per cent last year to 19.1 million, the expectation is the final figure for 2012 could be broadly similar.

Conor Whelan of BNP Paribas Real Estate, who is advising the airport on its commercial property portfolio, said that just like developers elsewhere in the city, it only made sense for promoters to embark on new office schemes when they achieved a specific rent level and minimum lease terms.

He said there would shortly be a need for substantial new office accommodation in north Dublin because little space had been developed in recent years.

Virtually all of the newly-built space on the northside was now occupied, some of it more recently by the ESB, BMW, the National Standards Authority of Ireland and Regis.

Whelan said that based on other development schemes of a similar scale, he believed there was potential to develop up to 111,484sq m (1,200,000sq ft) in the first phase of 20 acres.

In addition to the huge acreage owned by the DAA, the authority also manages a sizeable property portfolio – 100,000sq m (1,076,390sq ft) of office, warehousing and support accommodation and 75,000sq m (807,292sq ft) of hangar facilities.