Is Amazon lined up for Cork Airport Business Park office?

Online retailer Amazon is continuing to eat up Irish office space, with a major 170,000 sq ft Dublin deal just agreed. Might Amazon also be lined up for yet more space in Cork, where it currently has about 90,000 sq ft in three buildings at the Cork Airport Business Park?

The question arises as Building 5100 at the Cork Airport park comes to market with Lisney Cork, with 60,000 sq ft of offices for sale as an investment, of which about 18,000 sq ft is let to Avery Dennison, providing an immediate income of €304,000 pa, plus a further 18,500 pa form letting of car spaces.

Building 5100 faces a large Aviva block, and elsewhere in the same Cork park Amazon employs 800, across three buildings in just under 100,000 sq ft, all-in.

Amazon employs close to 1,500 in Dublin, across several lettings, and that’s set to expand considerably following news that Amazon is to lease the stunning D4 Vertium building currently under construction and due for completion in a year’s time behind the former Burlington Hotel.

The Vertium office building, on a €40m site, is being sold to a German investment company — rents are north of €50 psf. Design was by Henry J Lyons, who also did One Albert Quay in Cork.

The Amazon deal to take all 170,000 sq ft is said to be one of the largest in the capital in several years, and was done by Savills and Knight Frank.

That’s all in stark contrast to the rents and values to be had at Cork Airport Business Park, where the internally dated but well-designed 5100 building is guided at €5.5m, or €91 psf, to buy.

Agent Edward Hanafin of Lisney says the vacant 40,000 sq ft or so at the business park needs a new fit-out, but that that further capital expenditure is reflected in the €5.5m price sought. Rents for refurbished space here could be in the €14/€15 psf category, it’s understood.

As it stands, an investor will get a 5.6% net initial return, and that would rise significantly after further investment and lettings, says Mr Hanafin, adding that it’s possibly the largest immediately available vacant office space in suburban business parks around Cork (there’s a larger quantum of space in the city, up to 80,000 sq ft at Phoenix House, Monahan’s Rd, as reported here last month.)

Previous occupants of 5100 include Dairygold and GTS. Avery Dennison occupy their 18,000 sq ft on a lease, with over four years to expiry/renewal.

Other occupiers in Cork Airport Business Park, located 7km from the city centre and serviced by two hotels, include IBM, Bank of New York, Logitech, Aviva, Clearstream, Opentext, Redhat, and Newsweaver.

“The vacancy rate for offices in Cork is falling and there is currently very little vacancy within this park, with only smaller office suite available there,” says Mr Hanafin.

He says that at €91 psf to purchase, it’s significantly under the cost of new office space; recent building sales at the Cork Airport Business Park saw up to €130 psf paid for quality buildings and investments.

Details: Lisney 021 4275079