State group vigorously rejects suggestion it did not obtain the best value from its Spencer Dock property asset
CIÉ has claimed the value of its development at Spencer Dock could be "considerably greater" than $300 million (€345.4 million). The group's board said in a statement that its deal with Treasury Holdings was the "best way for CIÉ to achieve the highest value for the site".
Responding to Irish Times reports which said the company stood to receive annual rents of about €1 million from the first phase of the development, the group said the 200,000 sq ft building to be occupied by PricewaterhouseCoopers (PwC) represented 2.97 per cent of the total site.
It is understood that the formal annual rents to be paid to CIÉ will be about €1.5 million. However, sources have said that "tenant inducements" offered to PwC - a privately-owned company - will reduce the annual rental income to about €1 million.
CIÉ said: "The PwC development is the first on the site and the board feel that it is misleading to use this as the basis for a judgement on the whole development."
The statement made no comment on the details disclosed about the rent roll. It said: "The article has created the perception that the return from the PwC letting was the total return to CIÉ from the 40-acre development as a whole."
CIÉ said: "To ensure the best value for CIÉ and the taxpayer, CIÉ commissioned three leading firms of estate agents - Lambert Smith & Hampton; Hamilton Osborne King; and Gunne - to advise on the deal for them. The three firms concluded, independently, that the deal was in CIÉ's best interests."
Two Irish Times reports on Saturday stated that the PwC development was the "first phase" of the project. Following those reports, the Labour TD, Mr Pat Rabbitte, and the Fine Gael public enterprise spokesman, Mr Jim Higgins, criticised the deal.
The board statement said: "CIÉ vigorously rejects the suggestion that it did not obtain the maximum possible value from its Spencer Dock property asset."
It added: "At current rental levels in the Dublin area, the capital value of the site is in excess of €300 million at today's values. This is consistent with independent assessments made on behalf of CIÉ at the time the deal was executed. The future value to CIÉ will be considerably greater than this valuation."
Property market sources said land in the area had fetched €7.62-€13.97 per acre in recent years. This suggests the 41-acre site could be worth €312.42- €572.77 million on the open market.
CIÉ is locked into a deal agreed with Treasury Holdings in 1998.
The reports on Saturday stated that a seven-acre site currently occupied by Iarnród Éireann's freight division would be vacated this month to enable site clearance to begin. They stated that CIÉ faced a penalty from Treasury Holdings if it did not leave the site this month.
The partnership's initial plans for the area were rejected in 2000 by An Bord Pleanála. New proposals have been incorporated into a masterplan by the Dublin Docklands Development Agency (DDDA). If that plan is approved by the Minister for the Environment and Local Government, Mr Dempsey, the DDDA can initiate a fast-track planning process for developments in the docklands area.
