Cork's crime and poverty levels assessed before German fund paid €19m for Webworks building

Axel Wunnenberg, centre, MD of Quadoro Doric Real Estate GmbH, with Brian O’Callaghan, MD O’Callaghan Properties, and Prof Ronan Lyons, TCD, at the RDJ Property Outlook Cork Seminar.

CRIME and poverty rates in Cork, as well as waste management strategies, public transport and sustainability issues were among the indicators a €9bn German investment fund used, before deciding to spend €19m in a Cork city centre property investment, at the Webworks building.

Quadoro Doric Real Estate GmbH last year outbid a number of international and Irish funds, to secure Cork’s fully-tenanted investment building the Webworks building, initially launched for sale by Lisney Cork at €16m.

Quadoro aggressively outbid all other parties, and added the 2005-built Webworks to two Dublin office investments it had previously made, at Two Haddington Buildings, for €24m, and Ranelagh’s One Grand Parade, bought for €26m, showing an initial c€70m commitment to Irish property over the past two years.

Despite noting that Dublin had very high office rent levels, and that the Cork market of 600,000 sq m was quite modest, further Irish investments may be considered in a new institutional clients’ fund in autumn, Quadoro MD Axel Wunnenberg told a seminar ‘Property Outlook: Trends and Opportunities in Cork’, organised by law firm RDJ.

The fund analyses 503 European metropolitan areas, via Eurostat and an investment sustainability analysis: they would consider four out of five Irish locations they actively monitor, but from their current perspective, “would consider Limerick too small.”

The rationale and the logic of Quadoro’s investment criteria and indicators engaged the RDJ seminar attendees, notably when broadening out widely from standard metrics like yields, location and leases.

Mr Wunnenberg noted that a local audience and market could naturally consider their own ‘quality of life’ offer to be high, but he revealed that they also looked hard at indicators like levels of criminality and rates of poverty.

On these yardsticks, “Cork can be improved toward the European average” but “is on its way,” he judged, while adding “infrastructure could be improved... and public transport, it’s not efficient.”

Similarly, what he termed waste management “could be better organised.”

Notably, and describing Cork as “a satellite to Dublin,” he explained that from Quadoro’s base in Frankfurt, they could do business in virtually any European city, hold three or four meetings, and be back to Frankfurt that evening.

However, reaching Cork was a day and a half, or two days from Frankfurt, and so the fund worked meetings in Dublin on their assets there with their Webworks acquisition in Cork, and he indicated that adding more Irish properties would improve their management efficiencies.

When looking at locations in which to invest, Mr Wunnenber said Quadoro didn’t go further west than the Alps, or further south than the Pyrenees, and didn’t invest in Spain, or Italy, was primarily a euro fund, which also invested in Finland, which has the euro, and Denmark whose currency is euro-linked.

Of the 503 Eurostat locations, Dublin comes in at 202, and Cork and Limerick in the 240s, and “Ireland is well-placed, on average, as a place we can buy in,” he commented (top slots went to Oslo, Stavanger and Stockholm,) with London placed at 32 and Paris in the 80s.

But, the latter were too expensive for Quadoro to consider, said the fund’s MD, noting that on a European comparison, Dublin’s office rents are high and Irish residential costs are also high.

He put Cork office costs on a CBD (Central Business District) par with the likes of Hamburg and Dusseldorf.

Meanwhile, at the same seminar, TCD and economist Prof Ronan Lyons said looking at the big demographic picture or population growth and increasing urbanisations for Irish cities up to 2080 (ie 60 years’ time), he predicted that Cork will need 330,000 apartments of all kinds, versus 30,000 today: “in other words 60 years to build 300,000 apartments, or 100 new apartments every week, for six decades.”

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