The city is growing and changing, but unless the Government can deliver their objectives, more urban sprawl awaits, writes Peter O’Flynn
CORK City is in my blood. My mother grew up in Liberty Street, directly across from St Francis Church — between St Anthony Stores, where you could buy your penny sweets and religious memorabilia — and Dan Olden Butchers, who always kept the best cut of meat for my grandmother. My father lived halfway up St Patrick’s Hill, spending his time between Christian Brothers, keeping chickens in a small rear garden and buying single cigarettes in a small shop on MacCurtain Street (thankfully he stopped).
The result for us was, although we did not live in the city, many of our early memories were visiting our grandparents and walking around Cork City centre. This was in the late 1960s and early 1970s when the city centre was the absolute focal point for everything and the Queens Old Castle was the closest thing the city had to a shopping centre.
These days, I am happy to say I still spend plenty of time walking around our city. Working from our offices on Lapp’s Quay, I will often take a 40-minute walk at lunchtime around the city and down the docklands area to observe the daily changes and happenings. Having worked for 25 years in the Cork property sector and seen much of what has happened during that period, I have mixed emotions about where the city is at present and how we make the move to the next stage of the city’s development.
I believe we are currently at a crossroads and the decisions taken for the city in the immediate future will have a lasting effect for generations to come. Clearly, Cork has opportunities for significant expansion and has been identified by the Government in the National Planning Framework 2040 as playing a major role in future growth plans for the country. Government investment is an obvious and essential part of this and the decision to delay the commencement of the Dunkettle Interchange and Judicial Review of M28 is sending a negative message on the Government’s ability to deliver their objectives.
With the Port of Cork relocating to Ringaskiddy and Marino Point in the coming years, there is a clear pathway for growth within the city core — but this is unlikely to happen quickly without strong intervention and investment from central Government.
There are many positives to point to for Cork, including the continued investment and expansion of our third-level education providers, with UCC and CIT having ambitious investment and growth models over the next decade. This is the absolute key to both attracting foreign direct investment the FDI and growing indigenous company growth projections.
The spin-off in student accommodation is a direct reflection of this ambition. While there has been some local resistance to the scale and cost of this accommodation, however, it caters for less than 20% of the student population based on bed numbers, and without it we would be looking at an even more critical position in the property letting market.
The new proposed Business School at South Terrace, which UCC will develop over the next few years, sends out a strong statement to national and international investors that Cork is a place to invest for the future, both in human and capital terms. We see continued investment in student accommodation in future years, with somewhat less intensity.
This feeds directly into the job creation and office sectors as companies see clarity on the numbers and quality of graduates. In Cushman & Wakefield, the office market is a particular focus and the new office developments on the eastern end of the core city centre are the most obvious changes we have seen in Cork City in generations are ..
Starting with One Albert Quay and the current three schemes under construction at Horgan’s Quay and Penrose Dock, north of the river next to Kent Station and Navigation Square at the start of the South Docklands. Collectively, they provide over a million square feet of Grade A office accommodation and will house upwards of 6,000 employees once completed.
Although overall take-up in 2019 will be below the yearly average, this will be accelerated significantly in 2020 as the office market has been much more robust in the second half of the year. The quality of these developments is a big statement of intent to the overall market, and I believe we have now reached the critical mass required to show Cork as a real second option to Dublin for companies looking at the Irish market.
Although the change in focus for many employers has reignited the city centre and we see this as a continued trend, there is also demand in the suburbs and areas such as Mahon and Ballincollig and the business parks at EastGate and the airport will remain an important part of the office sector. Right now, we see the split at around two-thirds to one-third in favour of the city.
With positive demographics, strong occupier demand, and availability of capital, we can anticipate continued strength in this market in the coming years.
Coming back to the city itself, and the specific challenges we see — which will stunt future growth and the ability to create a bustling, vibrant city centre — are all-around accommodation and the roadblocks currently in the system for which there are no immediate solutions to deliver housing and apartments without strong Government interventions.
PRS — in simple terms, apartment blocks — were the highest investment sector in Dublin in 2019 and will continue to be so for the foreseeable future, as these are tailored towards international investors.
The rents required from availability perspective are targeted to the upper end of the rental spectrum and will remain out of reach for the majority of the market.
In regional Ireland, viability is the immediate challenge and we see very little activity taking place in Cork in the coming years. With such a lack of stock and all the office activity, we need to ask ourselves — where are the people going to live? Greenfields, I’m afraid to say.
Place-making and urbanisation are the future of our cities, and if the Government don’t open windows for our city councils to be able to encourage apartment development, then urban sprawl will continue and the opportunities around docklands, Tivoli, and Mahon will be a long time coming.
Talk of a rent freeze is a dangerous political game and will turn the tap off on international capital completely. You can forget about PRS then.
Having recently attended meetings in the city council, and speaking to both the executive and to city councillors, the one question that was highlighted was: “What can we do in council to assist and accelerate city centre accommodation?”
After some deliberation, my answer was both truthful and stark ... there is nothing you can do unless the central Government takes the lead, significant changes are made to current structures, and everyone buys into the possible solutions. In the meantime, I will continue to walk around our city and love what Cork means to me.
Peter O’Flynn is managing director of Cushman & Wakefield Cork