The DAA plans to target the next generation of foreign direct investment with its €4 billion Airport City, but it has a few economic hurdles in the short run to overcome first, writes Oonagh Reidy

Dublin Airport Authority is to build a new Airport City to the east of its existing site, in an ambitious €4 billion plan that could transform the area into a “world class zone” for international business.

The city’s masterplan developed by architectural firm HOK envisions the 350-acre area as “premier location for international business” offering 600,000 m2 of office space and more than 40,000 m2 of retail, hotel and conference facilities, targeting the next generation of foreign direct investment into Ireland.

The plan also includes a 16-storey tower and a specialized third level education and research institute for aviation, focusing on airport master-planning and finance. There will also be the construction of a “high speed automated people mover” linking up with the Metro airport stop.

The proposed new economic centre is set to be developed in five-year stages over a 20 year timeframe. The principal commercial offices promises to be built to the highest environmental and design specifications using the advanced materials and technologies.

The project is set to require 2,000 workers for its construction and fit out each year over its 20 year lifetime, and work is to commence is due to start in 2011 with the first phase of the City ready the following year, although this is subject to planning permission, according to a spokesperson from the Authority.

The proposal, however, has received the full backing of Fingal County Council and will be integrated into its 2006 Area Plan, according to the DAA. Park Developments, responsible for the Leopardstown shopping centre and the Greystones Harbour redevelopment, owns a 30-acre site beside the airport, estimated to be worth around €4 million.

Although this site has been included as part of the City, is it unclear whether the construction company ran by Michael Cotter will sell the site to the DAA or else opt to become a partner in the project’s development. Aer Lingus’ headquarters also sits on a 13-acre site incorporated into the City plan, which is leased from the airport operators until 2062. The site’s development potential is enormous and was reportedly being eyed up by Liam Carroll as he accumulated share interest in the airline carrier in recent months.

If successful, the scheme could prove critical to attracting business in the city and the DAA estimates it will add €1 billion to the Irish economy per year and contribute €600 million in revenues for the company, lessening their dependency on contentious airport charges.“The clustering of travel intensive businesses at (the) City will sustain the ongoing development of Dublin Airport, according to Declan Collier, CEO of the DAA.

However, how sustainable the city itself will be must be called into question in time of global economic uncertainty in particular amongst large multinational companies, Some reports have questioned whether Ireland, or even Dublin for that matter, is ready to have two competing business centres, in particular when the full implications of the credit crunch could still bite at the IFSC. GDP growth for this year predicted by Goodbody Stockbrokers to slow at just over 1%.

How the DAA intend to fund the venture is also yet to be decided and no decision has been made about this as of yet, although they predict it will come from “a range of sources, both domestic and foreign”.However, it is confident the development will be self-sustaining as revenues accrued from the city would finance further expansion at the airport itself and four Asian airlines so far have expressed interest in opening up new routes there. The DAA chairman has acknowledged the huge risks that are involved, stating they plan to take a risk-managed approach, with each phase of the project pre-funded and pre-let.

This article is an extract from an article featured in the Irish Construction Industry Magazine - Click HERE to subscribe