Irish interest expected at British auction

Sunday Business Post - Property Pages - Feb 18, 2007

Irish investors are expected to be among the bidders at a Savills auction of 63 commercial properties in London on February 26th. A wide range of properties in towns and cities all around the UK will go under the hammer, including retail units, warehouse space and offices.

Among the lots is a parade of seven modern ground floor terraced shops in Cambourne, Cambridgeshire with a guide price of £2.7 million to £2.9 million and a combined annual rent of £168,040, and a 522 square metre warehouse unit in Feltham, Middlesex with a guide price of £1.15 million to £1.2 million and rent of £72,844 per year.

There is also an ASDA leased unit and car park located in the village of Carcroft, South Yorkshire with a guide price of between £3.3 million and £3.6 million and an annual passing rent of £168,000.

According to James Cannon, head of commercial auction at London based auction house Savills, interest in British commercial investments remains strong among Irish buyers.

“The Irish are very entrepreneurial when it comes to property investment, they go for value whether in small or large investments,” he said.

Cannon said that Irish investors were interested in a wide range of different properties.

“The London area is still very popular,” he said. “You will find a lot of Irish investment in West London, and also in areas which have a historical affiliation with Ireland, places like Liverpool, Cardiff and Glasgow.”

Locations linked by low-cost airlines with Ireland were also very popular with Irish investors, who visited regularly to keep an eye on how their properties were faring, he added.

Cannon said that Irish investors were drawn by prices which are attractive compared to those at home.

“The average price in the UK commercial market is about £650,000 and the average in the residential market is about £250,000,” he said.

The current interest rate climate in the UK is similar to that in Ireland, and this is having a similarly calming effect on property prices at present. Regular hikes over the last twelve months have made borrowing more expensive. The Bank of England rate is now 5.25 per cent and Cannon said that he expected it to climb towards 6 per cent in 2007.

Rental yields were also predicted to fall slightly this year. However, Cannon said that these were still quite favourable compared to those derived from similar properties in Ireland.

“You are probably going to get a yield of between 5 and 5.25 per cent,” he said. “This is still a healthy return, but not as stellar as in 2006.”

When property appreciation is added in Cannon said that investors who take on a UK property should expect a total return in the region of 10 to 12 per cent in 2007.

Another factor which drew Irish investors to the UK, said Cannon, was the relatively cheap cost of concluding transactions, which made it easier for the investor to get in and out of a property in a short space of time.

“Irish investors see that transaction costs in the UK are much cheaper, typically around 4 per cent compared to maybe 8 per cent, and therefore people can trade,” he said.

Savills is the third largest auction house in the UK and transacted £412 million of property in 2006, up from £278 million in 2005.

Last year the firm sold a total 1,171 lots, with an average success rate of 87 per cent and an average lot size of £352,000.

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Cut out the e-mail threat to your business

Sunday Business Post - IT Security Supplement - Feb 18, 2007

Email threats to Irish business are becoming more sophisticated. Spam and phishing scams continue to cause concern, but blended threats, including downloaders, Trojans, spyware and key loggers, are also on the rise.

“It used to be just advertisements for Viagra and that type of thing, but people are really trying to profit directly from it now, for instance by getting your bank details,” said Eoin Goulding, MD of Integrity Solutions. “There are criminal organisations out there working fulltime to work out ways to get access to passwords and usernames.”

Traditional viruses attacked a machine or network and shut it down completely. They deleted system or data files, often requiring a full reinstall applications and programmes on all machines. However, the new generation of threats can do much more damage.

A key logger is a piece of software which can enter your network via an innocent looking email. It then proceeds to steal vital information about the business.

“If an employee is doing an ordinary online bank enquiry, inputting information can be intercepted and sent on somewhere else,” said Michael Conway, director of Renaissance Contingency Services.

Malware and trojans can take over a PC or server, and proceed to download malicious content or sending emails to everyone in an address book. Other viruses are merely hoaxes, which waste time for both office PC users and IT support staff.

These attacks take advantage of the fact that all Irish businesses, even the smallest, now use e-mail as a key business resource.

“Everyone has e-mail now,” said Dermot Williams, MD of Topsec Technology. “It is just standard, if you are in business you have an email address.”

Companies who have public email addresses – for instance info@, mail@ or sales@ accounts – are especially vulnerable to attacks. Automated programmes constantly scan the internet, harvesting these addresses.

“If your e-mail address is easily found out there, it is going to end up in the spam lists and it is going to be spammed very heavily and very aggressively,” said Conway. “A huge proportion of what is going around needs to be managed, up to 70 or 80 per cent.”

One way companies can protect themselves is by installing a gateway e-mail protection solution, which checks all incoming email before it is allowed into your internal IT system.

“This allows people to put in a very good security presence,” said Williams. “The gateway email security solution will be able to examine the content of messages coming in and spot all the different types of threat.”

With new email threats being developed and discovered each day, email monitoring systems must be constantly updated. Most software packages will now automatically update themselves using the Internet. However, they still need to be manually supervised.

With a gateway system IT staff do not have to check each individual machine each day to ensure all is secure. However, a gateway solution will not offer 100 per cent protection, as it cannot monitor incoming mail, or threats which enter your organisation in other ways, such as via USB drives or mobile devices.

For total security from email threats a company needs a presence on each individual machine in their organisation.

Conway puts the cost of implementation for an organisation of 12 to 15 users at about €1,000, depending on extra requirements such as mobile staff or an open network.

A large number of Irish businesses now rely on e-mail lists as a key business and marketing tool. Solutions must be able to strictly monitor outgoing mail to ensure that it is not propagating a virus or sending out inappropriate material to clients or customers.

“Your whole e-mail list could be compromised and people could be using you as a relay for sending out spam e-mails,” said Conway.

Failing to put in place adequate protection against e-mail borne threats can be particularly troublesome for SMEs. Just one rogue email getting through can spell disaster.

“It can just bring down your whole network, and your staff can be without access for days,” said Goulding. “It can really damage your whole business.”

Even where spam does not do huge damage to a company, dealing with the problem on a manual basis can eat into resources. Excessive incoming mails can waste bandwidth and slow down your internet connection. Time spent scanning through spam to find important e-mails is also time lost.

Spam and malicious messages are not the only e-mail security threat facing companies.

Solutions can monitor outgoing e-mail to ensure that their staff do not use their email systems to spread sensitive data or information.“For example I might decide to send myself, or a colleague or a friend, client details or a price list,” said Conway.

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Living the dream in Italy

Sunday Business Post - Property Expo 2007 Supplement - February 11 2007

Good value comes with buying a property in Italy, writes Dermot Corrigan

The proliferation of low flight airlines linking Ireland with Italy means that the 'sweet life' is now open to a new generation of Irish investors.

"Italy was previously known as an expensive holiday destination, from an accessibility and accommodation point of view," said Liz Maher, owner of Imagine Property Network. "The best thing about Italy is that the low cost airlines have gone in there in the last couple of years."

According to Kevin Hill, director of Overseas Property Centre, Italian property offers a mix of culture, lifestyle and value, which many other countries cannot match.

"Italy is a brand name almost, with the idea of the Dolce Vita," said Hill. "People like to be able to say that they have an apartment in Italy. There is a little bit extra rather than just a property abroad."

The direct air links between Ireland and Italy include Ryanair's direct flights from Dublin to Alghero (Sardinia), Bologna, Milan, Pisa (Florence), Rome (Ciampino), Trapani (Sicily), Turin and Venice (Treviso).

Shannon is linked by Ryanair with Venice, Rome and Milan. Aer Lingus flies from Dublin to Bologna, Milan, Naples, Rome (Da Vinci), Turin and Venice and from Cork to Rome. Other destinations including Genoa, Verona, Pescara and Lamezia are linked with airports in the UK.

Flight costs vary depending on the airline, destination and time of year.

Bargain basement low-cost flights can be found if you book off-peak and far ahead, although late bookings of high season flights can cost more than €200, plus taxes and charges.

Investor Trends
Irish buyers who purchase property in Italy tend to have one eye on the investment, and the other on the lifestyle they are buying into.

"You have both investors and people looking for holiday homes," said Maher. "Italy offers a high quality lifestyle, and a lot of people buy property in Italy for their own use."

Older investors, who are already thinking of their future retirement options, are also active in the Italian property market.

"There are quite a lot of investors who like to have a rental income and be able to use it themselves as well," said Hill. "Also people are looking to have an investment for now, which they can use when they are retired, or for longer periods of time than just your two weeks holiday during the summer.

Property Prices
Property prices in the Italian property market can vary greatly, depending on factors such as location, infrastructure and proximity to beaches, cities or skiing opportunities.

"The average cost of property in Italy is around the €200,000 mark, but there are differences between north and south," said Hill. "In Tuscany, you would expect to pay more than the average, whereas property prices in the south would be lower.

Hill said there was value in the property market in the south of Italy, which has long been overlooked in terms of development, but is now undergoing rapid regeneration.

"EU and Italian government funds are being spent on road and rail infrastructure as well as developing airports," said Hill.

Two bedroom apartments in the Calabria region, which occupies the 'toe' of Italy, can cost from only €80,000, while two bedroom townhouses start from around €140,000.

The island of Sardinia is also appealing to Irish investors, especially as there are now five flights a week linking Alghero with Dublin.

"Sardinia property at the moment is starting at about €78,000 and this is with sea view," said Maher. "The infrastructure is there and the shopping is good."

Maher said that good value investments were still possible in the north of Italy. Many Irish investors have bought properties in the Lake Garda and Lake Como localities in the Italian Alps. However, Maher said value could be found around nearby Lake Iseo, which is located between Como and Garda, near the Swiss border.

"Iseo is probably just as nice as Lake Como and the property prices are not as expensive," said Maher. "They start at around €100,000 to €120,000 for a one bed and €150,000 for a two bed. Most of those would have lake views."

Property prices throughout Italy have been rising steadily over the last five years, which means that the current rate of capital appreciation is attractive.

"The level of appreciation has been at about 10 per cent for the last couple of years and there have been signs of an increase, partly driven by people investing," said Hill.

"I think it will be far greater over the next few years, maybe as much as 12 to 15 per cent," agreed Maher. "Especially as the coastal areas are really starting to pick up.

Tax and Legalities
Investing in Italy is relatively straightforward from a financial point of view. A double taxation agreement is in place with Ireland. Registration tax must be paid on second hand properties, while VAT on new properties is charged at seven per cent for non-Italian residents. Hill estimates that accumulated VAT, notary fees and legal fees generally come to about 13 to 15 per cent of the purchase price.

The Italian property market has a number of unique features. The majority of properties are sold as a shell without painting, kitchen, furniture or floors. However, some developers will offer fully finished properties aimed at foreign investors with furniture and fittings included.

Italian properties also tend to be smaller than those in other countries such as Spain and Portugal, and might not have add-ons such as communal swimming pools and child's play areas, as planning restrictions are strict and, in the north especially, there is a shortage of land. Parking spaces are usually only available at an additional cost averaging €10,000 to €15,000

Italian financial institutions welcome business from international investors and Maher said that financing was readily available to Irish buyers.

"Interest rates are comparable, however bank charges are higher than Ireland," she said

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Peace of mind in Portugal

Sunday Business Post - Property Expo 2007 Supplement - February 11 2007

The pleasant climate, mature market and continuing good value all make Portugal a big draw for investors, writes Dermot Corrigan.

The maturity of the property market in Portugal is a serious draw for Irish buyers looking to for long-term security, according to Alise Crossick, founder and director of Ready2invest.

“You get a mature euro economy with good infrastructure and emerging market prices,” said Crossick.

Crossick said property prices in some parts of Portugal were comparable to those in Eastern European locations such as Bulgaria or Croatia.

“The Silver Coast has the most dramatic scenery, incredibly beautiful beaches, super golf courses and great, great prices and it is also just 45 minutes from Lisbon,” said Crossick.

She said that the island of Madeira and the Green Coast around Oporto also had significant investment potential.

Irish investors have been purchasing property in Portugal for many years. Carmel Crawford, Managing Partner of Algarve Property Ireland, says that for many Irish buyers the Algarve had become a home from home.

“The Irish like the Algarve very much,” she said. “Part of it is that the way we think is very similar to the Portuguese. The people are very friendly with a good sense of humour and are very good mannered.”

The Algarve regions of Quinta Do Lago and Val do Lobo in the Central Algarve are traditionally popular with Irish buyers, due to their proximity to Faro airport, which is linked directly with Dublin and Shannon by Aer Lingus and Ryanair flights. Ryanair also flies direct from Dublin to Porto and Aer Lingus links Lisbon directly with Dublin. Flights to Madeira are generally via London Heathrow.

The cost of flying from Ireland to Portugal varies according to the airline, destination and time of year.

Flights can cost little more than the accumulated taxes and charges if you book at the right time, although flying in the summer months or at short notice can mean prices of more than €200, plus taxes and charges.

Once you get there Irish visitors are generally pleasantly surprised by the cost of living on the ground.

“Everything is only half or even a quarter of the price that you pay in Dublin,” said Crawford.

The typical Irish investor in Portuguese property is interested in finding an investment opportunity which also doubles as a worthwhile holiday destination.

“Eighty per cent of our buyers are people who are looking for a holiday home with some rental to cover their costs and a place to go when they retire,” said Crawford.

“People like investments and want to experience capital growth, but they also like to be able to personally relate to the investments because then they will know other people will want to go there,” said Crossick.

Property Prices

Property prices in Portugal can vary greatly, with a lot depending on the location and the maturity of the development chosen. A three-bedroom villa with a pool on a golf course in an emerging area such as the Silver Coast can cost €265,000, while a 2 bed apartment in the Algarve may cast approximately €300,000.

Crawford said that, even within the Algarve, there can be significant price differentials.

“Eastern Algarve prices are a bit less, but it doesn’t have the infrastructure and facilities of the Central Algarve, which is absolutely beautiful and close to the airport,” said Crawford.

She said that Portugal offered investors the potential for attractive capital growth, with prices progressively rising in recent years.

“Property has never gone down here in the last five years,” she said. “I would say there is appreciation of around 10 per cent a year, maybe more, although it all depends on where you buy.”

Crossick said that investors can find higher appreciation potential if they look carefully at their options.

“I would advise investors to have a look around, and not just go for the obvious choices,” she said. ““You can get 15 per cent growth and more in certain areas.”

Crawford said that the Vilamoura XXI project, a €750m private development by the Lusort division of Spanish developer Grupo Prasa, would make the Algarve one of the top luxury European holiday destinations. The first six star hotel in the Algarve will open in 2009.

“The Vilamoura project will make a substantial impact to the prices of property already nearby,” said Crawford.

Local Finance

Tourism and related business are very important to the Portuguese economy, with the government and financial services sector working together to entice foreign investors.

“The financial market is very open, and they are used to providing mortgages for foreigners,” said Crossick. “The rates can start at 3.5 to 4 per cent.”

Rental income earned by non-residents in Portugal is subject to tax at 15 per cent, however inheritance tax has been recently abolished and Capital Gains Tax for foreigners has been reduced to 15 per cent.

The associated costs of buying a property in Portugal are also relatively favourable.

“Legal fees in Portugal are much smaller than they are in Ireland,” said Crawford. “In general lawyers charge about 1 to 1.5 per cent. Everything involved, including your lawyer, stamp duty (IMT) and notary fees will be no more than 7 per cent.”

However, investors in properties of €1 million and over face higher charges and fees

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Flexible Work Practices Benefit Companies

Ulster Bank has almost one-fifth of its workforce on a flexible working arrangement, and it’s proved to be a big success, writes Dermot Corrigan

Ulster Bank introduced flexible working initiatives for its 6,380 staff over three years ago, and according to Tom Doyle – its head of policy and employment – the result has been a success.

Doyle said that one in five of all Ulster Bank employees worked flexible hours.

“We reckon we have twenty per cent of our people on some form of non-typical working arrangement, between flexitime, compressed hours, term-time, part-time and job-share,” said Doyle.

“Productivity should be higher, because people are working hours that they have determined to be compatible with other things in their life - that is the theory. Although it is very difficult to measure that on the ground, certainly we are happy with the way it is working.”

Employees are eager to take advantage of flexible working hours, but for those arrangements to work, it is important that there are benefits for the employer as well.

“It has a positive effect on productivity, without any doubt,” said David Laird, Managing Director of Irish IT solutions provider Datapac.

“The happier people are the more productive they will be. We try and accommodate their requirements as best we can within the constraints and the need to run the business.”

A survey carried out last year by the European Foundation for the Improvement of Living and Working Conditions found that 43 per cent of Irish employers were offering some form of flexible working arrangement to their staff.

It said Irish workplaces were adapting to emerging changes in work organisation, technology and service delivery, as well as changes in the composition, needs and preferences of the workforce.

Doyle said the idea of work-life balance has gained ground in Ireland in recent years.

“People are much more conscious of the whole work-life balance thing,” he said. “They are saying ‘look, I need the time with my kids’, or ‘I am going to travel more’ and they can do both now.”

Perhaps the most pertinent work-life balance issue is the pressure created by lengthy commuting times.

“The introduction of flexi-time would have been due to problems with commuting to and from the office,” said Laird. “If it takes someone half an hour to get to work instead of an hour and a half they are coming in a much better shape to do their day’s work.”

According to Laird, flexi-time can help employers attract and retain staff.

“I have no doubt that, in the areas where we have been able to introduce flexitime, it has contributed to a better retention rate of employees,” he said.

“Also in terms of attracting employees it is an advantage, people even bring it up at interviews.”

If managed properly, the introduction of flexible working hours for staff should not increase labour costs.

“We haven’t seen any extra costs,” said Laird. “In fact because of better staff retention and productivity gains, we have probably seen cost savings as a real benefit to the company.”

Flexi-time options

The most typical flexible working arrangement allows employees to start or finish work outside standard work hours. In total, the hours worked are the same as under the standard working hour arrangement. However, there are other options.

“Flexi-time is part of a whole series of arrangements which we brand ‘Your Time’” said Doyle.

“We also have what we call ‘compressed hours’ so somebody could actually work a full five day week, but it could be worked over four days. People can work term-time, so that they have a lot of holiday time off when their kids are off.”

Depending on their own priorities, individual staff can use flexi-time to meet their own particular objectives.

“People come in early and go home early or come in late and go home late. That seems to suit in terms of avoiding the traffic and also in terms of dropping children to crèches and collecting them or arrangements they might have with relatives who mind their children,” said Laird.

Flexible working arrangements are more suited to some sectors and job types than others.

Both Ulster Bank and Datapac offer flexi-time to some employees only, depending on their individual roles.

“We found that customers expect to find someone there to answer the phone at 9:05 am, so we have to have people there to do that,” said Laird.

“It works better for people who are not customer facing and who are in support roles in the organisation or who are in software development.”

“It is easier to manage where you have a fixed amount of work,” said Doyle.

“In our call centres, or processing centres, where the work is measured and we can allocate people to cover, for instance.”

Practical Issues

For some companies that opt to introduce flexi-time, there are some legal obligations to be aware of.

For the majority of employees in Ireland, the legal maximum average working week cannot exceed 48 hours, as laid down in the Organisation of Working Time Act, 1997. As this total is calculated using an average, generally over four or six months, there are typically few problems for employers.

“When you average out the hours that people work we are still within the legal limits,” said Doyle.

As Irish society moves away from the idea of a rigid working week, most businesses, especially customer facing ones, will need flexible working hours themselves to meet customer demand.

“The use of flexible working arrangements is only going to increase,” said Doyle. “We would have some branches open at night to meet customer requirements so we need to have some flexibility to match that.”

Staff who work flexible hours are typically involved in organising their own timetables and working hours with their supervisor or the HR department.

“There is no real extra burden on the HR function in the company. We set it up on a very flexible basis, we have not found a need to over-measure in any way,” said Laird.

HR Software

Many of the latest HR software products facilitate the management of flexible working arrangements. Flexi-time management features can be provided as an extra module in a typical HR system, which looks after other functions such as payroll, training, employee history and health and safety information.

“The working patterns and hours of working are a key aspect of any of these systems. They try to identify exactly where your employees are supposed to be at a point in time and being able to schedule people effectively,” said Noel Dooley, sales director with Softworks. The company provide HR software to Irish businesses.

Dooley said that, over the last five years, flexible working arrangements had been introduced across the Irish labour market.

“A whole flexi-time culture now exists at many levels in many large organisations and in the government sector a large proportion of our business would be driven by the whole flexi-time environment,” said Dooley.

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