TWELVE years after the Irish property, construction, and economic crash, work is finally set to start on the very first non-student apartment development of any scale in Cork City in that time period, in an investment put at €40m.
Confidently behind the Lazarus-like 88-apartment project at Lancaster Gate, on the Western Road near UCC, and set for the build-to-rent sector, are O’Callaghan Properties (OCP), who say the economics of developing it out only stand up because of considerable work already done there back over a decade ago, before work was halted (see 2007 archive pic above)
The new 88 units will complete the redevelopment of the seven-acre riverside site which OCP acquired from Jurys Hotels in the early 2000s, but which had its final portion mothballed since 2008.
After the property crash and construction slump, a proposal was mooted at one point by O’Callaghan Properties to instead develop an €80m medical centre/private hospital on Lancaster Quay, but failed to get sufficient medical insurance sector support.
Contractors CField Construction, active in both the UK and Ireland, have done some preliminary preparatory works on the OCP Lancaster Quay site, beside a school and near St Fin Barre’s Cathedral just before Christmas, and are due to return to the site in April.
Completion of the 88 apartments is expected by December 2020, according to an OCP spokesperson, and apartments will be available for rent in early 2021.
Rents are likely to average over €2,000 per month, with a two-bed apartment of 1,000 sq ft there currently offered by a letting agency at €2,100 pm.
The two blocks of apartments will include 11 one-beds, 15 three-beds, and 62 two-beds, in the overall 240 apartment/180-bed hotel development designed by Henry J Lyons Architects, and which includes the very successful River Lee Hotel.
Excluding the many hundreds of purpose-built student apartments coming to the Cork market in the vicinity of UCC, Lancaster Gate is the first full-time residential development of apartments in well over a decade and starts in advance of other build-to-rent projects scheduled for Albert Quay, the South City Link Road, and Horgans Quay.
Key to the decision to finish out the Lancaster Gate development now was the fact the bases for the two apartment blocks, plus basement parking, to accommodate the 88 one-, two- and three-bed apartments have been in place since 2008, says second-generation OCP developer Brian O’Callaghan.
O’Callaghan Properties is currently developing offices at Navigation Square, capable of accommodating 3,000 workers, but last year Brian O’Callaghan publicly warned of the threat to foreign direct investment jobs from the lack of city apartments, and the non-viability of apartment construction in most situations given the costs involved.
He estimates the value of the existing bases and initial and enabling works at the Lancaster Gate development in the order of 20% of the overall build/development costs, put at €40m in total or €485,000 at an average cost per unit.
He says: “if it wasn’t for this, it would still very difficult, if not non-viable, to build new apartments from scratch in Cork.”
The company had completed the first phases of Lancaster Gate by 2007/2008, delivering 151 apartments in three blocks on the Lancaster Quay riverside site between the city centre and UCC and the Bon Secours hospital (since extended), just as the property bubble reached peak froth and then burst.
Other high-end Cork apartment schemes similarly hit by the timing of the Celtic Tiger’s demise include the Elysian, launching with 217 units, just a week after the Lehman Brothers collapse in September 2008 triggered global waves; Elden in suburban Douglas; City Square in Watercourse Road; and O’Callaghan Properties’ developments at Lavitts Quay, plus its 61 apartments at Opera Lane, above its new retail street development on St Patrick’s Street.
About 50 of the Lancaster Gate apartments are privately owned, while O’Callaghans own and let the balance, about 100, while the past three years has seen several very strong apartment resales at Lancaster Gate, including a penthouse which made €780,000 — less than the €1m+ that one had sold for in 2007.