Mahon Point tops as €214m invested in Cork commercial property last year

Mahon Point tops as €214m invested in Cork commercial property last year
Picture: Denis Scannell

Over €214m was invested in commercial property in Cork last year, with the €56m sale of Mahon Point Retail Park marking the largest single transaction.

While Cork does not feature in any of the 18 “mega-deals” (€100m plus) of 2019 investment sales, all of which relate to Dublin, it did record a number of high-value transactions.

These included the €36.3m sale of a mixed-use development at Half Moon St to Kennedy Wilson, who acquired the Elysian Building in 2018; the sale of CastleWest Shopping Centre in Ballincollig for €22m (acquired by a fund managed by Davy); an investment sale at Cork Airport Business Park for €21.25m, acquired by Henley Bartra who also acquired an office portfolio in Citywest in Dublin during 2019 (about €105m).

Residential, in the form of Leeside Apartments, raised €20m.

The apartments were bought for social housing by the Clúid Housing Association and Cork City Council from Lugus Capital, following an evictions’ controversy.

Details of the transactions are outlined in a 2019 investment market review by BNP Paribas Real Estate Ireland (BNPPRE).

Cork property featured in the largest office portfolio sale — the Green REIT portfolio of office and logistics assets across Dublin and Cork, acquired by Henderson Park for circa €1.5bn.

Most of this portfolio (95%) related to Dublin (88% office), but also included the office block One Albert Quay in Cork, built by the JCD group and acquired by Green REIT in 2017 for c€58m.

The largest residential portfolio transaction — the sale of 815 units across 16 developments — included 50 apartments on Harty’s Quay, Rochestown Road, Cork.

This portfolio — the XV1 — was acquired by IRES REIT for €285m.

Kate Ryan, associate director and head of research at BNPPRE said the €214m investment in Cork accounted for 3% of the total turnover of more than €7 billion in 2019.

In 2018, Cork accounted for 7% of the turnover but Ms Ryan said this was “underpinned in a large part” by the high profile acquisition of the Elysian Building by Kennedy Wilson for €87.5m.

In terms of investor origin, Ms Ryan said while there has been “much talk” of large scale European and Asian investors in Ireland, these investors are “not yet featuring in the Cork market”.

“We believe that this is a factor of a lack of prime opportunities coming to market, as opposed to a lack of interest among investors,” she said.

Of the €214m invested in Cork in 2019, €131m came from Irish investors.

Ms Ryan said European and Asian investors continue to be attracted to new CBD (central business district) office blocks which meet the highest standards globally, particularly in relation to sustainability and flexibility.

She said the latest wave of development is now “well underway in Cork” with major office developments such as Navigation Square, Horgan’s Quay and Penrose Dock being delivered, and that pre-lets to global occupiers such as Spaces and Clearstream at these schemes “further underpin the demand for such assets”.

“It is likely that as this continues, and in line with further progress on Ireland 2040 regional development plans, this will provide investment opportunities of the sort that will attract international investors,” Ms Ryan said.

The €7bn invested in Irish commercial property last year represents an increase of 97% year-on-year, with 64% of the total turnover tied to the 18 mega-deals.

Ms Ryan said BNP Paribas were “seeing a notable shift” towards the development of more mixed use assets that comprise retail, office, leisure and residential elements.

“This diversification of asset types puts an emphasis on “placemaking” which is attractive to investors as it allows schemes to be active at all times, rather than just during the day or night.”

BNPPRE is predicting a “strongly positive outlook” for 2020, while warning that issues such as transport and housing or government intervention in the tax system could have a negative impact on attracting investment.

DETAILS: BNPparibas.ie

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