That’s according to Frank Ryan, director of DTZ Sherry FitzGerald’s Cork offices as they publish a quarterly report on Cork Commercial Property.
DTZ acknowledge values still falling against a background of low levels of market activity, but recovery by 2013, while not certain “is a reasonable prospect,” notes Mr Ryan.
According to DTZ, the Dublin region will outperform the regional urban centres, where market stabilisation will only arrest the fall in values, with little prospect for growth, in the short term.
“Accordingly, and certainly in the short term, the prospect of selling existing prime buildings may improve substantially, but values, however, will be at a level that delivers scant prospect for ‘development’ across many sectors, into the medium term. Hence, development assets, will exhibit very low values — with little prospects for the sale of development lands,” they report.
Comparing Cork with Limerick and Galway, it was the only one of the three regional cities with office and industrial space under construction, about 25,000 sq m in each case, versus a reported 0% in Limerick and Galway. Cork’s office vacancy rate was highest, at 23%, versus 21% in Limerick, and almost 12% in Galway. Galway had the largest take-up in Q3, at 3,900 sq m, versus 3,500 sq m in Cork, and 2,100 sq m in Limerick.
The most sizeable city office deal of 2012 was taken up during the quarter when 1,550 sq m was occupied by AIB business banking in Matthew House on Matthew Street in the city centre, 50 metres from 66 South Mall.
Another sizeable letting was at Beckett House, Ballincollig where EMC occupied 850 sq m.
Analysis of the profile of the space transacted in Q3 shows that activity in the market is largely dominated by smaller-sized deals, as just three transactions measured over 150 sq m, and demand for the city centre absorbed 55% of activity, with most deals on a short-term basis with break options and rent free periods.
On the industrial front, 8,300 sq m was transacted, down from 10,400 sq m in Q2, but well up on the previous year’s equivalent of just 2,100 sq m. On a year to date, 27,050 sq m has transacted, up from a 2011 equivalent of 14,400 sq m.
The largest of the deals was 65,500 sq ft in the former Britvic facility in Little Island, let to company Flextronics, associated with EMC on the logistics front. The building, at Ballytrasna at the Sitecast Estate is owned by Eddie O’Connell, and let to Britvic on a long lease; agent Niall Guerin of Savills acted for Britvic.
Rent wasn’t divulged. but is likely to have been in the €3-4psf category, indicating a deal of c €200,000 pa.
Details: DTZ Sherry FitzGerald 021-4275454; Savills (Britvic deal) 021-4271371