Saudi developers forecast city centre spending boom
Saudi Arabian-based developers Fawaz Alhokair believe that its North Quays/Michael Street project will generate a spend approaching €3 billion within the city between 2020 and 2030.
The projection, included in a Deloitte report prepared for Waterford City & County Council (‘Project Ireland 2040 – Discussion of Opportunities for Waterford’), is based on internal analysis conducted by Fawaz Alhokair regarding its proposed city centre development. In an economic forecast, the company projects that its €280m proposition will directly contribute to a €256m spend in 2020, €289m in 2025 and €355m come 2030. Between 2020 and 2025, the average annual spend at their Waterford development is forecasted to increase by €5.5m, with that increase rising by €11m per annum between 2025 and 2030. And by 2030, Fawaz Alhokair believes the project will account for a five per cent (5%) share of the region’s entire retail market.
The Deloitte report, seen by The Munster Express, also refers to the South East’s €666m spending leakage in 2015, which has led to “direct and indirect job losses” both locally and in neighbouring counties.
The analysis contends that the region’s rate of spending leakage will be significantly reduced over the next 12 years due to the Alhokair project, in addition to increases in both tourist and indigenous retail spending. “The projected retail growth is driven by (the) North Quays (project) reversing the leakage as the only flagship development in the South East,” the report states.
The project will serve to reverse the “historic under index in tourism growth”, driving the 2015 tourism retail spend in the region from €278m in 2015 to a projected €1.2 billion by 2030
The projected tourism spend increase would lead to an employment and wage boost across the region, something city-based Councillor Eddie Mulligan (FF) would wholeheartedly welcome.
“The latest South East Economic Monitor (published in July) states that the 2016 median nominal income per house in the South East is €34,709,” he told The Munster Express. “Depending on the source, the average wage in Waterford is quoted at in and around the €30,000 mark and this inevitably leads to disposable income issues. The reduced disposable income resultant combined with the year on year reduction in job creation reported of 1.3% creates its own knock on issues contributing to a still very fragile local economy, a sentiment which is endorsed by almost all city businesses and retailers that I’m regularly in touch with.”
Cllr Mulligan added: “With 13.2% of the South East’s population earning the minimum wage or less, there has to be a focus on the education of our youth and the attraction of higher paid jobs to the city. West Pharma, which has invested €150m in their new, custom-built Waterford plant, is a good example of Council and State agencies working in collaboration to deliver these jobs and the potential attraction of Information Communication Technology (ICT) and financial jobs to the city centre via the North Quays development now requires a determined focus from all public representatives.” The Deloitte report also identifies a significant increase in house builds across the South East as a key component in driving the future development of the region.
“The real estate supply chain has significant unmet demand opportunities due to constrained supply in construction and finance,” the report states.
“Housing output has to double to make up the undersupply gap and meet the population growth. Without housing, growth in the other sectors (retail, tourism, tech) is significantly constrained.”
This echoes a recommendation made in a comprehensive housing report recently published by Sinn Féin TD David Cullinane, who called for the “empowerment” of Waterford City & County Council “to roll our realistic, deliverable and necessary public housing plans”.
He told this newspaper: “We’ve been told (via the National Planning Framework) that the ambition is to increase Waterford’s population by 60 per cent; well if you want to do that and then factor in the current (Rebuilding Ireland) housing target as it stands (687 by 2021), then that’s a clearly and woefully inadequate number of builds.”
The report also identifies the potential to create the country’s “best solar resource” here in the South East. It states: “A key goal is to reverse €1 billion worth of energy imported annually from the UK by capitalising on Waterford’s strategic location in Ireland’s ‘Sunny South East’, which has Ireland’s best solar resource. Plans are already in motion to create a South East solar community co-op with the potential of generating 700 jobs in the renewable energy sector by 2030.”
The plans entail the creation of a 105-kilometre pipeline generating 23 Megawatts (MW) across a range of regional sites, including:
* Twenty-five acres in WIT
* Twenty-five acres in Kilbarry (developed adjacent to a pilot housing development)
* Twenty-five acres in Dungarvan
* Twenty-five acres in Kilkenny
* Twenty-five acres in Wexford, in addition to five GAA clubs and three schools.
The pilot housing project at Kilbarry, a collaboration between Waterford City & County Council and the ESB, will be the “first new build, mixed use estate which will be energy independent (zero-to-grid) and carbon positive”, according to the report. “The houses will be rated with the Nearly Zero Energy Building (NZEB) standard and will include solar panels which will generate an estimated saving of (circa) €1850 per year. Electric cars financed as part of the new build mortgages will bring the cost of a new €30,000 EV car to €250 a month which generate a total estimated saving of €6,000 per year (inclusive of petrol/diesel saving. New home owners will be given the opportunity to reinvest a portion of their savings into the adjacent 23 acre solar farm, which will generate income for the community and attribute to the growth of the farm. This project will be one of a kind in Ireland, and put Waterford at the forefront of renewable energy innovation in the country.”