IT companies dominate Cork office acquisitions in the first quarter

The office sector in Cork recorded a strong first quarter in 2020 with the majority of new office space take-up accounted for by the tech sector.
IT companies dominate Cork office acquisitions in the first quarter
Across the 22,000 sqm of office space under construction at Penrose Dock, a large proportion has been pre-let by developer JCD. Picture: Eddie O’Hare
Across the 22,000 sqm of office space under construction at Penrose Dock, a large proportion has been pre-let by developer JCD. Picture: Eddie O’Hare

The office sector in Cork recorded a strong first quarter in 2020 with the majority of new office space take-up accounted for by the tech sector.

A report from Lisney shows the city’’s office market activity totalled 8,250 sqm across 11 deals in the first quarter. This is 31.2% higher than the previous quarter. Deal sizes varied substantially with one letting accounting for 56% of total take-up.

The largest office transaction was the pre-let of three floors within JCD’’s Penrose Two building on Penrose Quay in the city centre to IT company Qualcomm who are taking up 4,650 sqm. In addition, software company Varonis pre-let 1,850 sqm within Penrose Two. Law firm Matheson pre-let 750 sqm in the neighbouring Penrose One.

The remaining eight deals were all under 300 sqm, with the majority taken by firms in the professional services sector. Office accommodation on South Mall remained in demand with four transactions occurring on the street.

The city centre accounted for 95% of all activity in the quarter with the tech sector accounting for 79% of activity and the professional services sector 20%.

Lisney said prime city centre headline rents were stable again standing at €350 psm. Suburban office rents have remained relatively stable in the range of €183psm to €215psm depending on location.

However, the report notes there will likely be a pause in demand from foreign companies due to global Covid 19 restrictions on travel.

"Additionally, many companies will defer any decision making on property acquisitions until there is more certainty around the containment of Covid 19," Lisney said.

Overall, the investment market turnover in the region amounted to €8.25m between January and March.

Some larger-sized deals such as the Aldi in Carrigtwohill which was acquired by a French investment firm €5.6m skewed take-up levels.

The report also shows that the availability of industrial space has reduced and the overall vacancy rate across Cork stock recorded a new low of 4.4% with several previously available properties removed from the market.

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