CONSTRUCTION work will roll from one block to another at Cork city’s largest ever office scheme, Navigation Square, over the next three years, pledged developer Brian O’Callaghan this week.
But, with scope to host 3,000 jobs, in 350,000 sq ft of office in four blocks on Cork’s Albert Quay and the first of over 600 Clearstream employees due to move into Block One in May, he once more warned about the lack of residential accommodation, and affordable apartments, to house the city’s growing workforce and population.
The economics of building apartments “just don’t stack up right now,” said Mr O’Callaghan, who said if they were viable to construct, to sell and to rent to a ready market and at affordable prices, his company O’Callaghan Properties (OCP) had sites capable of delivering many hundreds of units, such as at Anderson’s Quay which could take 250 apartments.
He called on Government to tackle the clearly-signalled shortage and cost issues, such as addressing the 13.5% Vat rate on new housing, as well as other levies and charges. And, he also suggested some incentives to apartment investors should be considered, similar to the success of the Help to Buy scheme for First Time Buyers.
The shortage of residential accommodation is obvious in Cork city, where the population is forecast to rise by 125,000 by 2040 under Government strategies to counter-balance Dublin, against a backdrop where Navigation Square will be able to accommodate 3,000 workers when complete in three years time, in tandem with other large office schemes such as at Penrose Dock and Horgans Quay/HQ.
Even Dublin’s delivery of apartments is “out of kilter’ with the pace of office development and take-up, and may soon serve as a brake on the arrival of new, internationally mobile FDI jobs.
Mr O’Callaghan instanced the fact that just two of the 117 tower cranes currently visible on Dublin’s skyline were for apartment buildings, and one of those two in the capital sites is delivering apartments to rent at up to €3,500 a month. The cost of building apartments needs to come down, to increase supply and bring down rents to sustainable levels, argued the second-generation developer — who acknowledged recent Government/Department changes in lifting locally-imposed height restrictions and other apartment design alterations.
OCP are actively building apartments in London, which are zero rated for Vat, and the company is also delivering around 200 new houses a year in its Cork heartland at Ballincollig.
But, it last built apartments in Cork city in the mid 2000s, at Lancaster Gate where it still has an undeveloped portion of the former Jurys site to complete. It also built apartments at Lavitts Quay, and at Opera Lane above the retail street.
However, the buyer/investor model that was around at that time to purchase, often via company and pension investments, “just doesn’t exist any more, that market has disappeared,” said Mr O’Callaghan, who reckoned their Anderson’s Quay site (which currently has an offices planning grant) could take up to 250 apartments, under the new building height guidelines.
Other city sites earmarked for ‘Build to Rent’ apartments, but where no work has yet started, include Horgans Quay where BAM/Clarendon have the hotel element of their mixed use project next to Kent Station under construction, while Glenveagh Properties are expected to go for planning shortly for up to 1,000 units on the Live at the Marquee site.
Developers JCD are also looking at apartment options for some of their sites, according to sources, including possibly on the Careys/Sextant site, between JCD’s One Albert Quay and OCP’s Navigation Square.
Fit-out work is advancing at OCP’s €90m Navigation Square’s 150,000 sq ft Block One, now about 75% let, with the first of Clearstream’s c 600 financial sector workers due at their desks from May, and Block Two is due for fit-out by August, with space under negotiation to as-yet undisclosed users, Mr O’Callaghan indicated.
The financial exchange group Clearstream is taking 80,000 sq ft at Block One, at ground and the top three floors, typically with 20,000 sq ft floor plates, with provision for a further 45,000 sq ft, if yet-further Clearstream jobs are confirmed.
The development has a double basement with 250 car parking spaces, and 350 bicycle spaces, with showers, and a bicycle service station, while a series of specially commissioned art works and murals, as well as a model depicting the city’s streets and outline in the 1890s, spread across the first block’s internal levels. The Henry J Lyons-designed building, with jaunty top floor canopy, was constructed by BAM behind the retained limestone facade of Navigation House, which appropriately had an original 19th century use as a trading and exchange house for Cork’s interntional shipping trade.
OCP’s Brian O’Callaghan said exchange trading Clearstream had up to 25 nationalities among its Cork workforce (it is relocating from the Cork Airport Business Park, where its former offices are for sale for €7.5m) and he added that the company, which is part of the Deutsche Bourse Group, was very successful in recruiting, with most new jobs so far going to graduates, already in the Cork region.
The next ten years has the potential to transform Cork city, and OCP is active in looking at other future development sites as docklands development on both the south and north docks is becoming a reality, and the company would like to develop for residential and hotels, as well as commercial/offices, “to create a sense of place,” stressed Mr O’Callaghan.