It comes as CIÉ has this month signed off on development terms and a partnership agreement for a vital six-acre portion of its large Horgan’s Quay, Cork city centre rail station ground, three decades after private development terms were first considered for the high-profile, under-used waterfronting site.
Developer Owen O’Callaghan had initially spotted the site’s potential 21 years ago and proposed a science park for a site of three acres on Horgan’s Quay back in 1995, but pulled out after political accusations of a “cosy cartel” as it had not gone to the open market.
In the mid-2000s a deal was agreed but never delivered with Manor Park Homes, for 14 acres on Horgan’s Quay, to include a conference centre and 1,200 apartments, in a development valued at that peak time at €700m.
Finally, after a summer 2016 tender process via agents Lisney, CIÉ has now signed contracts with major Irish developers and investors, Clarendon Properties, jointly on 50:50 partnership with BAM Ireland, for a mixed use density and relatively high-rise scheme of developable scale, on 6.1 acres.
It’s likely to include office blocks, possibly aimed post-Brexit at financial services/FDI-type users given Cork’s competitiveness on office rents relative to Dublin and other cities, as well as badly-needed, build-to-let apartments, some neighbourhood retail and leisure uses, most likely a new hotel, all on a south-facing quayside fringing the rail station’s new interchange, and close to other infrastructure hubs such as the bus station.
The rail station currently handles 2m passengers a year.
The deal sees Clarendon and BAM getting a 300-year ground lease on the six acres, and CIÉ will get an income stream into the future, entitled to 10% of market rents, or a set annual rent, (whichever is the greater), and the joint developers now have a seven year period in which to secure planning permission and develop out the site.
CIÉ’s deal for development is similar to how it offered and secured developer Johnny Ronan of Treasury Holdings for its Tara St Dublin rail site, where Mr Ronan proposes a 22-storey €130m office tower.
In comparison, Cork’s larger Horgan’s Quay/Railway Street site (which includes protected structures) is zoned for mixed development, with heights of four to six storeys, and up to seven storeys allowed fronting the quays.
The successful chosen development team of Clarendon and BAM is notable: BAM has built much of the past decade’s new office stock in Cork City and in Mahon, including One Albert Quay, and is currently building out the former Capitol cinema site for developer John Cleary, as well as being involved in the Events Centre site, jointly with Heineken.
Clarendon Properties, headed up by seasoned practitioners Cork-born Tony Leonard and Paddy McKillen, operates in Ireland, the UK, US and Continental Europe and has made a recent strong foray in Cork, acquiring the Wilton Shopping Centre, adding it to retail investment at the Savoy Centre and Queens Old Castle.
Meanwhile, a related Clarendon company has acquired the Eir site in Ballintemple, also via Lisney. Clarendon secured H&M for its College Green, Dublin former NIB building two years ago, and owns office investments in Dublin, London, Boston and Berlin.
A spokesperson for the joint developers said it was too early yet to be specific about the Cork city quayside’s exact mix, or development value.
Clarendon director Tony Leonard said they would “shortly start to engage with all stakeholders, with a view towards entering the pre-planning process at the earliest opportunity”.
“It is a strong strategic fit with our experience of developing properties and sites in high quality locations and our vision is to realise a superb, benchmark development that will showcase Cork.
"We look forward to partnering with the team at BAM Ireland, with whom we have collaborated with on a number of developments in the past few years,” said Mr Leonard.
Theo Cullinane, CEO, BAM Ireland described Clarendon Properties as an experienced urban developer and said “BAM looks forward to expanding its role through the rejuvenation of this important urban quarter at Horgan’s Quay.”
Having brought the site to tender in June, agents Margaret Kelleher and Edward Hanafin of Lisney said they were very pleased with the interest shown “in this unique offering, there was an extensive range of interest, locally, nationally and from overseas.”
Awarding the development rights on an income sharing deal to Clarendon Properties/BAM Ireland, CIÉ group property manager Niall Grogan said the team “have an abundance of experience, expertise and the financial strength required in the tender.
“The development will be good for CIÉ in generating an ongoing income stream to help fund our public transport services, and will be good for Cork in providing a landmark, mixed-use development to meet the emerging needs of the local and regional economy and community.”
Meanwhile, other significant office schemes are proposed in the evolving CBD area downriver of the city centre, and clustered around the €100m City Quarter, including at Andersons Quay, Albert and Kennedy Quays.
And, Port of Cork’s plan to sell its Custom House HQ and bonded warehouses (guiding €7m, via DTZ), located just 100m from CIÉ’s Horgan’s Quay site has, according to sources, attracted some very high-calibre architecture-driven design proposals.
: Lisney 021-4275079