Cork as a city has the building blocks in place to develop to a sufficient scale to compete on the international stage with major developments across many sectors, writes Isobel O’Regan.
Cork, Ireland’s second city, but a city in it is own right, is connected and open for business.
Cork is not a competitor to Dublin, but a complement; after all Cork’s story is unique and different and not worthy of comparison.
Comparison kills creativity. We must stop comparing; and start creating.
This is further backed by the National Planning Framework (NPF) which proposes to enable all parts of Ireland to successfully grow and change, by facilitating a shift towards Ireland’s regions and cities other than Dublin, while at the same time also recognising Dublin’s ongoing key role.
Cork already has the building blocks in place to excel under this framework, and in particular under National Policy Objective 5 which aims to: develop cities and towns of sufficient scale and quality to compete internationally, and to be drivers of national and regional growth, investment and prosperity.
In the five-year period of 2013 to 2017 the Cork office market grew by 3.6%.
This was primarily as a result of the development of One Albert Quay and 14-23 Grand Parade (the Capitol) which brought some much sought-after Grade A office space to the city centre.
2018 saw further growth in the Cork office market with Apple completing and occupying the 170,000 sq ft expansion of their HQ in Hollyhill.
This year also saw Voxpro sign a lease for 38,000 sq ft in City Gate Mahon, with the Cork company now employing 2,350 staff and intending to continue to take on additional employees as its client base grows.
Voxpro’s client base includes major market players such as Google and Airbnb.
Cork’s office market is due to increase by a further 3% by early 2019.
This will be on completion of several developments which are currently under construction such as 85 South Mall and Block A Navigation Square with a further 282,000 sq ft to come on stream shortly after.
Based on the number of developments currently under construction, the Cork office market is set to expand by a whopping 7.5% by 2020, which includes the new developments at Horgan’s Quay and Penrose Dock.
This expected increase in the size of the Cork office market over the next two years shows that there is confidence from developers and demand from investors and occupiers for high quality Grade A space in Cork.
International investors such as Kennedy Wilson, State Street Global Advisors, Green Reit REIT and Real I.S have all recently entered the Cork market and office developments currently under construction in the city centre are already pre-let to occupiers such as KMPG, Forcepoint and Clearstream.
Both the current and prospective development of office space in Cork puts the city in a position to offer companies a viable alternative to Dublin and to also compete on an international level.
For companies such as these to expand and succeed in Cork they require a large pool of educated workers.
Graduates from both UCC and CIT enter the workforce every year with this likely to increase based on the current investment in education that is underway in Cork.
Following the university’s purchase of the former Cork Savings Bank in the city centre, UCC’s business school on Lapps Quay now sees Cork as home to Ireland’s largest undergraduate business school.
CIT and IT Tralee are working together to create the first Munster Technological University (MTU) which aims to combine resources and strengths to allow for further development and growth.
The MTU will have a substantial economic impact on the region and will contribute both to direct economic activity and economic development.
An economic impact study has conservatively assessed that the MTU will deliver an annual economic contribution to the region in excess of €285 million.
The Cork market is reacting to this investment in education and to the demand from employers for educated workers with the student accommodation sector gathering momentum.
Amnis House on Western Road was completed this year providing 190 student beds with three other developments currently underway which will add a further 612 beds to the market.
Based on the planning permissions that have been granted by the council this could increase by another 2,560 beds should seven other developments come to fruition.
To put some context on this, there are, at a conservative view 5,000 student beds in the Cork market at present.
If those developments under construction, and with planning granted, reach completion it would result in an increase of 63% in the number of student beds provided in the city and suburbs.
Opportunities such as these have attracted names such as Ziggurat, Summix, and Round Hill Capital to Cork.
Cork city and suburban hotel stock currently stands at approx 2,600 rooms with a further 165 added just before Christmas, with the opening of the much anticipated Maldron Hotel on Beasley Street.
Also, under construction is a 136-bedroom hotel at the €160m development of Horgan’s Quay which is due for completion by November 2020.
Dalata have become a major player in the Cork market as they also own a second Maldron Hotel in Shandon along with the Clayton Hotels on Lapps Quay and Silver Springs.
Further to this planning is in place for a further 1,269 hotel beds in the city and suburbs.
This comprises of seven new builds and four extensions and would increase the current market stock by more than 40% should these projects come to the market.
A further 208 beds could also potentially come on stream with the development of two hostels in the city centre for which planning was granted in middle of this year.
This prospective development is buoyed by Fáilte Ireland’s recent findings which indicates that more than 2.7 million tourists visited Cork in 2017 generating revenue of more than €830m.
In Cork city’s catchment, Fota Wildlife Park and Blarney Castle and Gardens are major attractions and were ranked the 11th and 12th most visited fee-paying tourist attractions in Ireland in 2017.
Passengers through Cork Airport grew to 2.3 million in 2017, an increase of more than 3%, while the number of passenger cars through Cork ferry port in 2017 was nearly 26,000, up more than 8% on the previous year, and cruise ships visits also continue to grow in importance.
Looking at the big picture, these are exciting and encouraging developments in the Cork market.
We are in the midst of witnessing a significant development cycle in the city core and there is potential for even further development in some key locations.
What the statistics show is that our absorption of development in the past should not influence our capacity to grow exponentially in the future.
We have myriad plans that indicate what the city can deliver but we need to work together to ensure that this growth is not just incremental.
The development community are a key part of this and need to be encouraged to take the risks that will benefit all.
Cork has an excellent template for development, we need to look forward and tell our own story.
Isobel O’Regan is a director of Savills, Cork