Navigation Square offices do the business for Cork

By Tommy Barker

ACTIVITY levels have stepped up in both office and industrial markets in Cork in the second quarter of this year, after a sluggish year start, with levels of take-up for Quarter 2 on a par with those last seen in 2012.

Agents Lisney described Q1 2018 as “subdued,” in their latest research document, but acknowledge a market pick-up for Q2, especially in the office market which saw 24,500 sq m of space occuped. However, this was primarily driven by Apple’s occupation of its own 15,000 sq m office expansion at its Hollyhill plant on the city’s northern fringe.

Also significant were office occupancy deals and pre-lets at Navigation Square for O’Callaghan Properties to Clearstream, pic, right (with market sources indicating work may start in the next month or two on a futher block on this strategic OCP site), at City Gate Park in Mahon, and the new build at 85 South Mall, to be anchored by KPMG, and with other deals agreed, but as yet unconfirmed, on this John Cleary Developments (JCD) building.

A total of eight deals transacted in Q2, a quarter described as “extremely robust,” and all of which were lettings with the IT sector accounting for 85% of volume, with professional services following with 12%.

Of interest too was the letting of 850 sq m at floor four of City Quarter at Lapps Quay, more so for the profile of the occupier than the scale of space being let. It has been taken by Glandore, who offer serviced offices and co-working space in Dublin and Belfast, and who now are expanding their presence in Cork, adding to competition in this burgeoning serviced suite market. They join the likes of Regus, at Phoenix House on Monahan Road, and Republic of Work, occupying part of 12 South Mall since 2016.

“This sector has begun to make a greater impact on the market and is something we expect to see more of in the short to medium-term, as is the case in Dublin,” says Lisney director Edward Hanafin, noting that Cork’s office vacancy rate has dropped now from 14% to 12.8% as “the significant transaction activity for the quarter has, not surprisingly, resulted in a decrease in supply levels.”

Currently under construction are 26,900 sq m of offices, including 13,800 sq m in Navigation Square and 6,700 sqm in No 3 Eastgate in Little Island, for Lilly. And, a further 163,250 sq m of accommodation is in the planning process, across 10 locations including the city centre, Cork Airport Business Park, City Gate, Mahon, Westfield Office Quarter, Ballincollig and Eastgate Business Park, Little Island (6,400 sq m).

Almost mirroring the Q2 office pick up was Cork’s industrial sector, say Lisney, again remarking that Q2 2018 “had the largest quarterly take-up since 2012, and there was an appetite for larger sized deals.”

They chart 13 deals, up from just seven in Q1, with the average size of a transaction also increasing to 1,850 sq m. Most deals were lettings, with two sales, the largest being of a vacant c 7,000 sq m warehouse on Monahan Road, on 3.31 acres by Páirc Uí Chaoimh, likely to have been picked up for future development potential.

According to Lisney, “with the lack of prime industrial stock on the market and increasing rental values, it is expected that speculative development will commence in the next 12 months. This expectation has been reinforced by a number of industrial land sales in the past few months.”

Details

: Lisney 021-4275079