Mahon office on the block for €21m

By Tommy Barker, Property Editor

A suburban Cork office block is being offered as a sale and leaseback opportunity, with a €21m price guide, by its owner-occupiers, Quest International Software.

Quest International Software, City Gate Park, Mahon, Cork, is being offered as a sale and leaseback opportunity, with a €21m price guide.

It marks one of the largest pure office investment sales in the southern capital in some time.

Offered this week and likely to have a national, international and fund-based response is the entire 2012-built Block C at City Gate Park, in Cork’s Mahon, a highly successful suburban office campus totalling 300,000 sq ft, developed by John Cleary Developments (JCD).

New sale and leaseback terms over a 15-year period have been drawn up for the local IT and security solutions company, which is headquartered in California, and which has had a presence in Cork since 2002.

The 30 year-old company was briefly owned by Dell, from 2012 to 2016, and has offices in 24 countries, including key offices in the US, Russia, China, Brazil and Ireland, where it occupies 87,400 sq ft at City Gate Park.

The sale offers a 7% net initial yield return after standard purchase costs.

Selling agents Brian Edwards and Natalie Brennan of CBRE said the €21m offer is “one of the most exciting investment sales of 2018.

“It presents a unique opportunity to acquire a modern office building in the most successful office campus in Cork,” and said that they anticipate “a strong level of interest from Irish institutions and European investors.”

City Gate Park’s other occupiers include Dell-EMC, McAfee, Qualcomm, FireEye, Voxpro, and law firm Ronan Daly Jermyn.

The 300,000 sq ft park has 500 car parking spaces, with 180 reserved for Quest in the four-storey, over basement Block C.

Rents on the new lease in the JCD-developed Quest-owned building equate to €18 per square foot, at a time when new Cork office builds are tipping over €30 per square foot.

“The office market has consistently been the best performing of the commercial real estate sectors in Cork over the last number of years. Similar to Dublin, the Cork office market has experienced strong recovery. Strong office demand, coupled with the lack of development for several years, has resulted in rising rents and low vacancy rates,” said Mr Edwards.

There has been a recent, strong focus of large-scale investors securing large assets in the Cork market.

“This reflects a very welcome broadening of the investor capital base but also illustrates the confidence that these investors have in Cork’s investment market and its future,” he said.

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