Development of industrial zones - comparison with Ireland

1. Development of industrial zones - comparison with Ireland Farannan Tannam Seminar "Imovinski standard", 29. i 30. lipnja 2010.

2. Presentation content • Diagram of the investment climate • Target sectors • Key attractions • Best zones in Ireland • Case study Hertz • FDI investors –known unknowns! • Investment facilitation through property • Trends

3. Communication Knowledge/ Research Business Environment Skills Legislative Policy Infrastructure Investment climate

4. Some target sectors in Ireland • Life Sciences (Pharmaceuticals, Biotech and Medical Tech.) • Clean Technology • Entertainment and media • ICT • Shared Service Centres • Expansions of existing operations • R&D

5. Key selling points • Low Corporation tax (12.5%) • EU membership • Pro-business - all party political support for FDI • Good reference sites • Young well educated workforce • Good place to live • Good infrastructure and a range of property solutions • Exceptional collaboration - joined up thinking

6. Property Solutions – key selling points • A range of “investor ready” zones and available buildings throughout the country and other fall-back sites in private ownership identified and assessed • High quality well planned and well managed industrial zones to accommodate target sectors • Property provided by municipalities, private developers and IDA Ireland • A large amount of vacant office space in Dublin (where rents have fallen by about 40% over the last 2 years) • Delegations/procedures to ensure speed in decision making

7. The Best Zones in Ireland • Municipality • Private • IDA Ireland

8. Grange Castle Dublin - How It Came About • Municipality had a large land bank in a good location and wanted to create jobs and generate property taxes for itself • An experienced zone consultant was hired • Municipality provided high quality infrastructure and targeted major projects in conjunction with IDA Ireland • Major investments secured - the largest bio-pharma plant in Europe from Wyeth (now Pfizer) and a Microsoft Data Centre • Courageous step by municipality and highly successful

9. Galway

12. City West Dublin • Private developers saw an opportunity to provide a high quality zone to cater for a wide range of clients, local and international who are seeking high quality buildings and surroundings • Zones within zones for different requirements • Well maintained with innovative master lease provisions • Expensive location and high service charge • Joint venture on part of site with IDA did not succeed

15. College Park - Best IDA • Municipality owned site and sold part to new Technical College • Entered into a joint venture with IDA Ireland on remainder of the land with IDA financing the provision of infrastructural works & sharing in the proceeds of land sales • Only light manufacturing and internationally traded services permitted • Has been slow, due of amount of property on market, the recession & increased focus on developing the poorer regions in Ireland - long term investment!

18. Customer Contact Centre Hertz Dublin

21. History • Hertz wanted an immediate start-up so were allocated an available building on an IDA zone • Purchased site from IDA at market value and built their own facility • Near a large labour pool • Initially basic European reservation call centre and attracted native language speakers from 29 different countries • Expanded to become the European Service Centre for accounts and administration operations employing 1,000 people in head office functions (EMEA) such as HR and finance

22. Key factors • Immediate availably of a building provided under a PPP arrangement between IDA and private developer • Availability of a site at a set price for Hertz to build with expansion space • Had no difficulty in attracting foreign language staff to Dublin – high quality of life • Initially basic call/booking centre - good experience led to major expansion and taking on higher level functions • Profit made by IDA on land sale financed other zones

23. FDI Investors - Known unknowns! • Success rate in attracting future FDI • Sectors and sub-sectors which will be attracted • Location of investments • Stage of development/type of buildings • Size of sites and size of buildings • Key - flexibility

24. Investment facilitation through property • Substantial investment usually with no immediate return - time horizon perhaps 20/30 years • By nature requires municipalities to be courageous • Model of publicly owned investor ready sites and buildings does work all around the world • Private property developers will follow FDI successes and will provide sites and buildings • PPP for infrastructure on zones not the answer • Successful zones are a result of team effort and joined up thinking

25. Trends • Immediate availability – quick start up • Quality of working place/attractive surroundings • Image conscious • Environmental awareness • Good estate management and future zone strategy • More “services” projects seeking office type buildings in (flexible buildings) • Significant Implications for the future of older industrial zones

27. Thank you