New era for apartments as rental takes centre stage

IRONIC, really — some of the country’s best apartments, finally built with enough space, storage and services to support long-term use and designed to suit owner occupiers and what happens? The property market dies, and first to go is the apartment buying sector.

Enter, thus, some of the best rental stock, being let en block and en masse by their developer owners, many of whom haven’t even tried to sell a single unit in their completed developments.

It is a new model, and certainly helps keep the bank from the door, and chips in to cover interest repayments, if not the capital sum.

There’s never been so much rental stock, and of such a new and high standard, too. In Cork city alone, examples include O’Callaghan Properties’ 61 top-notch apartments above St Patrick Street in Opera Lane, which featured in these pages last month. Its first tenants moved in last Thursday, the same day H&M opened on the street beneath. Already, 16 in the first block of 35 are let, and “they are flying out the door,” says Catherine McAuliffe of Savills who rightly raves about the urban vibe to be experienced here, living above the shop 21st century style .

Glass is a big feature, inside and out, as are the views of church steeples and rooftops, and many have large outdoor terraces as well. Party time? For sure.

Given such keen demand, some Opera Lane apartments may be offered for sale (think well into the €400,000s,) but the current thrust is towards rentals, says Savills’ Catherine McAuliffe.

Rents for 950 sq ft two-beds range from €1,200 to €1,350 for a two-bed, with 1,260 sq ft three beds topping €1,400 in rent. Each has sizeable utility rooms, which in earlier c 500 sq ft apartments might have qualified as bedrooms or a kitchen in terms of size.

Those utility rooms are complemented by basement storage units, and each comes with one car parking space — literally under Patrick Street and its environs.

Already, since H&M and the new Dunnes opened, the streets between here and Paul Street have picked up life, and this will grow incrementally as Gap, New Look, Next, River Island and a whole host more open their doors between now and Christmas. Visible to the west, across the rooftops, are the apartments on top of the new Cornmarket Street TK Maxx retail development, all gone straight to the rental market and with two-beds letting there for €1,100 to € 1,200 per month.

Further west, O’Callaghan Properties’ Lancaster Gate units by Jurys can be glimpsed, again with most of the remaining ones gone to rental, and with the last block to be built now substituted by plans (at Bord Pleanala level) for a private hospital. Another large supplier of quality units in the city centre is Frinailla’s City Square scheme on Watercourse Road, with internal courtyard gardens a quality of living bonus (Frinailla has just put back the sales launch of Orchard Gardens, due to launch this autumn, until next spring, but reports some sales already via Lisney.)

With such a growing glut of supply and competition for tenants, those clearly feeling the pinch and dropping rents are the owners of older stock. Older Cork city apartment stock is now down at the €850 to €900 a month level.

Over at the landmark 17-storey the Elysian, which bravely set its face towards sales in September 08’, only to see the world and the country’s banks implode, rentals are now the order of the day and the bringers of life to the 214-apartment building with a standard-setting one-acre secret garden in its embrace.

Apart from the few dozen that have sold, about 25 are let, says Trish Stokes of Sherry FitzGerald, while her counterpart in Sherry FitzGerald’s letting business, John Murray, says typical renters there are professionals and couples in their late 20s. Two-beds average €1,250 per month.

“My business is up 25% over the past year,” says Murray, who adds the rise in available stock and standard is a marked feature of what is available to renters, and the target market that would previously have been buyers at almost any cost.

He, and other letting agents like Conor Farrell of Dublin and Cork firm citylettings.ie, paint a strong picture of who’s renting, and who’s paying the best rents right now: those who would have been first-time- buyers (FTBs) , and that catch-all phrase, young professionals. He’s also renting some apartments and townhouse at Elden in Douglas for O’Flynn Construction: two-bed apartments there are making €1,200 per month, while three-bed townhouses are appealing to older tenants, and are making c €1,600 per month.)

With a very healthy 51 of 62 apartments let at Park Avenue, a Kenny Group development off Cork’s South Douglas Road (and all since July ‘09) cityletting.ie’s Conor Farrell has seen a strong cohort of tenants coming from the IT and gaming sector, one of Cork’s growing employment bases. Companies like Big Fish and Blizzard Entertainment are growing rapidly, the latter now has over 600 employees in Blackpool, all of them technology savvy — and so the notion of apartment living, with TVs in all bedrooms, 32’ large flat screen tellies in the living space, free Sky movies and sports, and CAT 6 cabling for broadband connectivity are just what the renter might have ordered.

Those Park Avenue apartments (built just off the south ring link road, on the site of the former HB ice cream warehouse) have two basement car parking spaces per apartment, optional storage units as well, Jacuzzi baths, CCTV and even special dedicated areas for clothes drying as well.

Here, in well-finished and well-landscaped grounds, one-beds are making €950 per month, two-beds €1,040 to €1,100, penthouses€ 1,350 and three-de as much as €1,500 per month.

Renters are coming from Apple, Blizzard, Heineken, Bank of New York, the HSE, Schering Plough, RCI, Zenith, Pepsi, Boston Scientific, Citco, Accenture, EMC and the like, notes Conor Farrell. “The common theme here is that there are a lot more jobs to be created in Cork and many of these people are moving here due to job creations. This is especially true with some of our tenants who have come from places like Germany, Spain and Italy for jobs here.”