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Irish renewable energy firm Amarenco has entered a joint venture agreement with Infracapital, the investment arm of Prudential-owned M&G Investments, to roll out as much as €1bn worth of projects over the next five years.

The deal is the culmination of about nine months of negotiations by company founder, former Bord Gáis boss John Mullins, who has been trying to secure additional backing to roll out renewable energy projects in France, the UK and Ireland.

The new joint venture – Amarenco Infracapital Renewable Investments (AIRI) – expects to develop about 100 megawatts of greenfield energy projects a year over the next five years.

Precise financial details were not disclosed. But it’s understood that based on an average spend of €1.8m to develop each megawatt of renewable energy, the total spent will hit €1bn within five years.

As part of the agreement, Infracapital has invested in an initial portfolio of three operational solar energy projects in France developed by Amarenco. Those sites generate 75MW of electricity and have a 20-year supply deal. Amarenco has a total of five operational solar farms in France, accounting for the bulk of its €250m of assets.

Mr Mullins said that Infracapital has taken a majority stake in the joint venture platform. He added that new energy projects will be bankrolled by both Infracapital and Amarenco, with the completed projects then transferring to AIRI.

“We’re both taking on risk in development,” said Mr Mullins. Subsidiaries of Amarenco will then asset manage the projects. “We end up being an independent power producer,” he added. Infracapital has so far raised and managed over £2.6bn (€3bn) across four European infrastructure funds. Its investments are spread across utilities and utility services including sewage, water and power supply in countries including the UK, Sweden and Slovakia.

Mr Mullins said that cementing the AIRI deal meant Amarenco will probably not have to look for any additional funding for “some time to come”, and that existing funds – when recycled through projects – will be sufficient for it to bankroll project development alongside Infracapital.

“We’ve built up significant internal resources over the past 18 months,” he said. “The capital we have will cycle fairly quickly from a development point of view. The amount of capital we have to apply to these developments is less than previously because we’re now sharing the cost.”

Investors in Amarenco include tech guru Bill McCabe’s Oyster Capital, and Ian Quinn, the founder of medical device firm Creganna, who is also Amarenco’s chairman.

“The co-investment for us means that we are in a position now to concentrate on rolling out the assets,” said Mr Mullins. “We’re looking to acquire developers, starting in France, but we’re very much in the market for talking to Irish developers too.”

He added: “We were never going to have the level of capital that was required for that scale of activity. For us, it’s recognition by Infracapital – one of the major players in Europe – that we’re a team that can deliver them value, but also deliver a very sizeable portfolio.”
Article Source: http://tinyurl.com/kbwqb42

Hibernia Reit has signed a five-year deal with Iconic Offices for the establishment of a serviced office and co-working business in Dublin city centre.

Under the agreement Hibernia will provide the property at Block 1, Clanwilliam Court and flexible workspace specialists Iconic will manage the business operations. The income generated will be shared. Hibernia will fund the majority of the fit-out costs, estimated at €1m, and will receive the majority of net income from the occupier up to a level equating to headline rent of approximately €45 per sq ft over the five-year period. Iconic will receive the majority of any net income above this level.

With Iconic set to take up some 21,000 sq ft of space over three floors at Clanwilliam Court, the agreement will see the average vacancy level across Blocks 1, 2 and 5 at the complex fall to below 2pc.

Hibernia acquired Blocks 1, 2 and 5 in June of last year for €51m. The buildings’ former owners – international property investors London + Regional – had been seeking €54m when they put them on the market at the end of last April.

Founded in 2013, Iconic Offices is already a tenant of Hibernia Reit at SOBO Works, an 11,000 sq ft office on Windmill Lane. With the addition of 21,000 sq ft at Clanwilliam Court, Iconic will have a total of 151,000 sq ft of space to offer across 15 buildings, equipped with state-of-the-art IT facilities to support start-ups.

In other news, Hibernia Reit announced yesterday that it has pre-let 16,000 sq ft of space at Two Dockland Central, in Dublin’s North Docks, to inbound marketing and sales software providers, HubSpot Ireland, at an initial rent of €52.50 per sq ft on a 19-year lease with a tenant-only break option in the 11th year.

The company already occupies 27,500 sq ft in One Dockland Central.
Article Source: http://tinyurl.com/kbwqb42

Ireland and the UK are described as “inescapably intertwined” in the British government’s newly published Brexit plan.

The White Paper on Brexit says the “unique relationship” shared by the two countries warrants special recognition in the forthcoming negotiations between the UK and the Europe Union.

A detailed section arguing for the retention of “as seamless and frictionless a border” as possible will give a boost to the Irish Government, which is coming under increasing pressure to reveal the detail of its own Brexit strategy.

The British document states the Common Travel Area should be retained on the basis that it is linked back to the establishment of the Irish Free State in 1922.It also notes that Irish citizens have had a special place in Britain long before both countries joined the EU in 1973.

“Since well before the establishment of the EU, Irish citizens have had a special status within the UK, rooted in the Ireland Act 1949 and reflected in the British Nationality Acts.

“This status provides Irish citizens in the UK with additional rights beyond those associated with common membership of the EU,” the White Paper said.

According to the 77-page document there are “hundreds of thousands of Irish nationals residing in the UK and of UK nationals residing in Ireland”.

“There are also close ties and family connections, particularly across the Border between Northern Ireland and Ireland.”

Citing the historic visit of Queen Elizabeth to Ireland in 2011 and President Michael D Higgins’s reciprocal visit to the UK in 2014, the paper added: “The relationship between the two countries has never been better or more settled than today, thanks to the strong political commitment from both governments to deepen and broaden our modern partnership.”

On the potential for customs posts between Northern Ireland and the Republic, the White Paper stated that cross-border movement “is an important part of this economic integration”.

“Over 14,000 people regularly commute across the Border between Northern Ireland and Ireland for work or study,” it said.

The paper says that both the British and Irish governments have already agreed on a desire to protect the “reciprocal treatment of each other’s nationals once the UK has left the EU”.

“In particular, in recognition of their importance in the Belfast Agreement, the people of Northern Ireland will continue to be able to identify themselves as British or Irish, or both, and to hold citizenship accordingly,” the White Paper said.

Asked about the effectiveness of the Irish response yesterday, Tánaiste Frances Fitzgerald said the Government is “under absolutely no illusion about the nature and scale of the Brexit challenge and it has a clear and comprehensive plan”.

Fianna Fáil’s Marc MacSharry told the Dáil the Government was offering “constant platitudes” but needed to publish a plan about how bilateral negotiations with Britain and the EU will go. “Brexit has the potential to wreck the Northern Ireland peace process and the Good Friday Agreement and to impact seriously on Border communities which are already struggling in the context of damaged trade,” he said.

Ms Fitzgerald responded: “To continue to talk about a lack of preparation is not the approach that the main Opposition party should take, from a reputational point of view as far as Ireland is concerned.

“It is very clear that the Government has done deep analysis across all areas of the Brexit network.”

She again rejected calls for a ‘Brexit minister’, saying the Taoiseach was in charge.

Article Source: http://tinyurl.com/kbwqb42

THE number of home buyers taking out a mortgage has risen to a six-year high.

Close to 30,000 people drew down a mortgage last year, new Banking and Payments Federation figures show.

In the last three months of last year more than 9,000 mortgages were drawn down.

This is the highest number of draw downs since 2010.

Economists are now expecting a “bumper” level of mortgage activity this year because of the easing of Central Bank lending rules and the help-to-buy scheme.

The total number of mortgages taken last year was 29,498.

This was up 16pc on the previous year, with the value of the mortgage put at €5.66m.

First-time buyers remain the single largest segment of borrowers, accounting for almost half of all draw-downs.

New buyers and mover-purchasers accounted for 84pc of the total value of mortgages drawn down, with the rest made up mainly of investors.

The level of mortgage switching continues to increase, but it is coming off a very low base.

There were 851 re-mortgage loans during the quarter to the value of €191m.

Goodbody Stockbrokers’ analyst Susie Crawford said the mortgage market will be even stronger this year.

“We see a bumper year ahead with a robust labour market and looser marco-prudential rules contributing to increasing house prices. We forecast an 8pc increase for 2017. Our forecast is for gross mortgage lending of €7bn in 2017.”

Less onerous Central Bank lending rules for first-time buyers took effect from the start of this year, known as marco-prudential rules.

First-time buyers can now get mortgage approval with a 10pc deposit. Last year a deposit of 20pc was needed for new buyers borrowing more than €220,000.

And a Government tax rebate came into effect this year.

It will mean new allows first-time buyers to claim back tax paid over the previous four years of up to 5pc of the purchase price of a new-build property, up to a limit of €20,000.
Article Source: http://tinyurl.com/kbwqb42

Overhead costs for manufacturers rose at the fastest pace in over four years in January, as higher commodity prices, currency moves and price rises at UK suppliers hit the sector.

In a sign competitiveness is being hit, some firms hiked prices in response, according to the latest Investec Purchasing Managers Index for the sector in Ireland.

On a positive note, the increase in new orders seen during the month was the fastest since July 2015, with new business from abroad rising sharply.

Philip O’Sullivan, pictured, economist with specialist bank Investec, said rising costs dented profits.

“The rate of input cost inflation accelerated sharply during January to the fastest since October 2012,” Mr O’Sullivan said.

The seasonally adjusted PMI posted 55.5 in January, broadly unchanged from the reading of 55.7 in December and signalling a further health improvement in the sector. A reading above 50 signals expansion.

Meanwhile, in the UK sterling’s fall since Britain voted to leave the European Union stoked the sharpest rise in factory costs on record last month but little boost to exports.

The Markit/CIPS UK Manufacturing PMI showed growth there softened, but remains relatively robust.

Article Source: http://tinyurl.com/kbwqb42

Returns for investors across all sectors of Irish commercial property could slow to a growth rate of between 7pc and 10pc in 2017, down from 12.4pc in 2016 and only about a quarter of the 36pc level seen during the lift-off in recovery seen during 2014.

Nevertheless, Ireland looks set for another year of relative global outperformance.

These were among the findings of recent surveys undertaken by MSCI, which publishes the authoritative monitor of the Irish property industry, the IPD/SCSI property index.

In MSCI’s survey of about 150 experts in the Irish market, as many as 47pc of them expect returns of between 7pc and 10pc for the index in 2017; 26pc of respondents expect returns of between 5pc and 7pc, while 12pc of the experts forecast returns of between 10pc and 12pc.

Over the medium term to December 2019, 45pc of respondents forecast 5pc to 7pc total returns for the IPD Ireland annual property index; 26pc forecast a 3pc to 5pc return and 12pc expect a 7pc to 10pc return.

A surprising result showed that student housing emerged as their favourite choice for investment, with 24pc of respondents saying this was their pick to buy for a three-year hold.

MSCI undertook the survey at its presentation last Thursday in the Westbury Hotel in Dublin.

Equally surprising was that the retail and office investments, which had been the favourites among trophy hunters during the boom, have fallen dramatically and are now ranked as the two least popular choices.

Retail attracted only 7pc of those punters and offices 9pc. It’s not known how the composition of the audience gathered at the Westbury Hotel affected those responses.

What are now considered alternative property sectors also proved more popular than the two pillar sectors of the industry.

As many as 16pc are opting for large-scale residential rental investment; 15pc for healthcare and 11pc for hotels and leisure.

Industrials, a sector which is often referred to in the trade as ‘sheds’, proved second most popular with 18pc of the vote. This support for industrials tallies with their market performance in 2016.

Sasha Thomas, senior associate MSCI, says industrials received proportionately more of the investment in 2016, accounting for 11.69pc of the industrial sector’s capital value while office investment accounted for only 8.09pc of the office sector’s capital value.

Furthermore, industrial saw the strongest rental growth, up 10.57pc compared to 7.48pc for offices and 6.67pc growth for retail. Industrials’ performance was also reflected in returns as they achieved the highest total return in 2016 at 19.3pc followed by retail 12.9pc and offices 11.9pc.

“Within those the top-performing segments were North Dublin industrials, central retails and Dublin 4 offices,” Thomas adds.

MSCI’s survey of 444 properties across the retail, office and industrial sectors, valued at €8.4 billion, showed 4.7pc income returns and 7.4pc capital growth in 2016.

Meanwhile, the smaller JLL Index released this week shows even stronger returns of 13.6pc in the full year.

JLL reports that capital values increased by 2.4pc in the last quarter and 7.8pc over the year. This was driven by growth across all three sectors, with Industrial up 17.9pc; followed by retail 7.2pc and offices 6.5pc.

Hannah Dwyer, JLL’s head of research in Dublin, said that overall capital values have increased by 78.3pc since the bottom of the market but still remain 41.4pc lower than the peak in Q3 2007.

Rental values across the entire JLL Index portfolio increased by 4.1pc in the last three months and 10.6pc in the last 12 months. Office rents had the greatest increase in the year, up 14.1pc followed by industrial 7.8pc and retail 6.2pc.

Ms Dwyer points out that good returns are still available for investors as the 13.6pc returns for 2016 are in line with the 13.2pc long-term annual return for the JLL Index since it was launched in 1974.

This is yet another indicator that properties are not overvalued at current prices.

“In 2016, initial yields of all three commercial sectors in the JLL Index experienced compression with the overall down from 5.4pc to 5pc. In particular, the initial yield for the industrial sector has compressed from 7.1pc to 5.6pc in the last 12 months. The industrial sector had a particularly strong year, with growth in values and returns, which are being driven by strong fundamentals in the occupier market,” she added.

Meanwhile Marie Hunt, director of CBRE Ireland, expects to see continued appetite for Irish real estate from core buyers throughout 2017, with the biggest challenge being a scarcity of prime product to satisfy the volume of bidders.

She expects total returns, rental growth and investment spend volumes to be lower in 2017 than last year.

Prime yields are expected to remain stable this year but CBRE believes that there will be some upward pressure on secondary yields.

Nevertheless she agreed that rising rents in the prime industrial and retail sectors could see capital values continue to rise in those prime sectors.

The MSCI survey also showed that over the five-year period to September 2016, Irish commercial property outperformed both equities and bonds. During the most recent three years commercial property achieved annualised returns of 25.2pc compared to 13.5pc for MSCI’s equity index and 9.7pc for bonds.

While bonds outperformed over the longer 10-year timeframe, Irish commercial property also outperformed equities in that time frame.

MSCI’s Malcolm Hunt said Dublin was one of Europe’s most successful office markets in terms of attracting capital in 2016.

Its €1.2bn in investment, was the second strongest in Europe, surpassed only by Madrid with €2.5bn.

Furthermore, while cross- border capital flows are slowing at a reduced rate across the world, Ireland was the fifth strongest in terms of attracting foreign capital out of 27 markets surveyed.

About 70pc of the €4.3bn Irish investment in 2016 was accounted for by overseas investment.

Mr Hunt also reckons that Irish real estate stands out because initial Dublin yields are not yet at their record lows.

“There are also signs of built-in income growth; cross-border investment remains strong and it looks like another year of relative global outperformance,” he said.

Article Source: http://tinyurl.com/kbwqb42

Ireland Inc is now actively targeting business, investment and recruitment from the Middle East as a result of the US travel ban on Muslims.

US President Donald Trump’s controversial immigration policy is sparking a rethink across the Muslim world.

Middle Eastern businesses and wealthy families have traditionally targeted the US for investment and education.

But the ban and associated anti-Muslim sentiment is forcing them to look elsewhere in the West.

Tech companies are already actively looking to recruit highly skilled professionals from Muslim backgrounds.

The State’s key investment agency also says Irish business and education institutions can take advantage of the turmoil.

Irish-American tech company Intercom has already intervened in the current US immigration controversy by offering to pay the legal fees of Muslim tech workers thinking of moving to Dublin.

In a move that will enhance Dublin’s reputation as a global tech skills capital, the software firm is offering to pay legal fees of up to €250,000 for “at least” 50 Muslim tech workers if they consider Dublin as their next career destination.
And Enterprise Ireland’s (EI) senior official in the Middle East says European companies could follow suit and may soon be vying for business in the region. EI’s Middle East and North Africa regional manager Joe Breslin also pinpointed education as a sector in which Ireland could benefit.

Mr Breslin said Irish companies in areas such as healthcare and FinTech (financial technology) all have US competitors in the Middle East.

“If your product is able to compete… and you come down to the last three or four and decisions are being made, the fact that it’s a US company versus a European company, I think the European companies have on balance a greater potential to win that business now,” he said.

Mr Breslin, who is based in the United Arab Emirates, said students from countries including Saudi Arabia and the United Arab Emirates come to Ireland to study medicine and engineering, although the US is by far the largest destination from the region.

“A lot of people in this region are now seriously worried about their children going to the US to study because all of the media here in the Middle East is negative against the United States in terms of the reaction there is to Muslims in particular,” he said.

“This is an area that we would see as a potential because those people are now going to be looking at alternatives in terms of where their children go internationally for third-level education, and that’s an area of opportunity.”

Junior Enterprise Minister Pat Breen is this week leading an Enterprise Ireland trade delegation to a healthcare exhibition and conference in Dubai.

The visit is focussing on boosting business opportunities for 20 Irish companies attending the conference.

Meanwhile, Intercom’s move was announced by its chief executive Eoghan McCabe. “If you’re in tech and you’re from one of the newly unfavoured countries, or even if you’re not, but you’re feeling persecuted for being Muslim, we’d like to help you consider Dublin as a place to live and work,” the firm’s co-founder said.
“If you decide you want to look into moving seriously, we’ll retain our Dublin immigration attorneys for you and pay your legal bills with them, up to €5,000. We’ll do this for as many as we can afford. We should be able to do this for at least 50 people.”

Mr McCabe said the offer was not meant as an opportunistic recruitment drive to take advantage of the current instability around migration policy in the US.

“We will explicitly not be pitching anyone on working for Intercom,” he said.

“This is not a recruitment drive for Intercom.”

Intercom’s move comes after Limerick-born Stripe co-founder Patrick Collison announced that he would match donations of up to $50,000 (€46,350) to the American Civil Liberties Union (ACLU), which has pledged to fight Mr Trump’s new immigration policy.

Article Source: http://tinyurl.com/kbwqb42

A government plan aimed at mitigating the effects of Brexit places a major focus on women as well as the poaching of “globally renowned” workers from the UK.

The ‘Action Plan for Jobs’ also confirms that a “rainy fund” will be launched in two years time when the fallout from Brexit is expected to be felt across Europe.

The plan, seen by the Irish Independent, sets out in detail for the first time Ireland’s strategy in responding to the shock referendum result.

It reveals that almost €2m worth of funding will be disbursed through the Department of Justice aimed at getting women back into the workforce.

Gaining access to new markets for the beef industry, the ramping up of trade missions and significant investment in tourism initiatives are also detailed.

The launch of a “town centre revival framework” to support towns and villages through their local authorities is also a central plank of the document, which runs to 105 pages.

A specific section on Brexit outlines 20 short-term proposals, which include the hiring of new staff in key State agencies and the provision of specific supports to companies in the food and drink industry.

And the plan also promises to poach highly skilled researchers from abroad.

“Develop Ireland as an attractive location for mobile, globally renowned researchers, including UK-based researchers, and strengthen Ireland’s research funding collaborations with the UK and Northern Ireland,” it states. The action plan is due to be launched in Dublin today by Taoiseach Enda Kenny and Jobs Minister Mary Mitchell O’Connor.

However, the Opposition will undoubtedly criticise the document, which contains various proposals ranging from childcare and education to rural affairs.

The plans on Brexit were launched just 24 hours after it was reported that British Prime Minister Theresa May plans to unlock Article 50 by March 9. According to the action plan, a special fund – known as a “rainy day” fund – will be launched in 2019, when the British government hopes the Brexit negotiations will conclude.

The document sets out specific measures for the eight regions. These include a plan to develop a series of loops off the Wild Atlantic Way in the mid-west to encourage a greater spread of visitors and alleviate high traffic.

In the mid-east, commuters who work in Dublin will be targeted by a ‘Work Where You Live’ awareness campaign, encouraging entrepreneurs to set up businesses in the region.

The government is to explore the potential for a “digital payments cluster” along the M1 corridor. PayPal already has a facility in Louth.

Article Source: http://tinyurl.com/kbwqb42

A MAJORITY of so-called millennials are positive about the economic outlook for Ireland in the year ahead.

A new survey by financial firm Deloitte found that 56pc of Irish people in the 18 to 34 year age group – dubbed millennials – expect the economy to improve over the next 12 months despite widespread geopolitical uncertainty.

Almost a third (31pc) said their greatest concern was terrorism, while 25pc worried about crime and safety.

Income inequality, climate change and wars were joint third on the list as the most concerning thing for millennials.

Forty-three percent of those surveyed said they approved of politicians taking controversial or divisive opinions if it’s truly what they believe.

More than two thirds (67pc) said they approved of politicians using straight-talking language.

Exactly half of those between 18 and 34 said they are planning to stay with their current employer for more than two years, while a quarter said it was their intention to stay more than five years.

“While we are faced with global challenges such as Brexit, Trump and looming elections across Europe, we hope that millennials will remain positive as the world continues to lead in an ever-changing environment,” said Valarie Daunt, a partner at Deloitte.

More than half (53pc) believe automation will improve productivity, while 46pc think that it will result in greater economic growth and provide more time to focus on creative activities.

However, a strong number (40pc) believed that automation will reduce the number of jobs available to them in the future.

Article Source: http://tinyurl.com/kbwqb42

The head of BNP Paribas Securities Services met Finance Minister Michael Noonan for an hour in December, during which they discussed the implications of Brexit.

It is understood, however, that BNP – which already employs around 100 people in Dublin – gave no specific details about its plans to deal with the fallout from the vote.

It comes as fund management company FundRock announced it is opening a Dublin office to deal with an anticipated increase in cross-border funds activity out of Ireland post Brexit. Japanese investment group Daiwa is also considering Dublin as a location.

BNP Paribas Securities Services ceo Patrick Colle met Mr Noonan on December 16 in Dublin.

It is understood that a briefing had been prepared for the meeting by the Department of Finance with an eye on being ready for a Brexit discussion, but BNP gave no details of its plans. However, the implications of the Brexit vote were discussed by the two men. Meanwhile, FundRock Management Company said it would be opening a new office in Ireland to grow its presence in Dublin, Luxembourg and the UK.

FundRock said that following the market uncertainty created in the investment management sector post-Brexit, it is opening an Irish office to service its clients’ needs and capitalise on the “significant rise in UK-based deal flows”.

Revel Wood, FundRock ceo, said the move to Ireland is a crucial part of the company’s long-term strategy.

The Dublin office will be headed up by Ross Thomson, who has nearly 20 years of fund industry experience in Luxembourg and Canada.

Meanwhile, Daiwa Securities Group is considering Frankfurt and Dublin among candidate cities to host European operations it moves out of London following Brexit, the Japanese brokerage’s top executive said.

The Tokyo-based firm will need to establish a licensed entity in the European Union following the UK’s decision to leave the bloc, ceo Takashi Hibino said. It is running simulations with a consulting firm, he said yesterday at a briefing in Tokyo with his successor, deputy president Seiji Nakata.

Daiwa has about 450 employees in Europe, mostly in London, which will remain the main location for most of its operations in the region. Japanese banks and brokerages are among global financial firms considering moving some functions away from the UK capital to retain access to the EU.

Prospects for Japanese securities firms have improved since November after stocks rallied on a weaker yen following Donald Trump’s victory. BNP Paribas Securities Services in Ireland has operated as a centre of excellence for the servicing of investment funds since 2001.

Article Source: http://tinyurl.com/kbwqb42