Cork is seeing development momentum despite reduced commercial property transactions
Positive commercial developments in Cork include more than 6,500 square metres of new office accommodation now available at The Counting House office scheme in the Brewery Quarter. Picture Denis Minihane.
Cork is seeing continued momentum in the construction and development sector despite 'subdued' transaction levels for commercial property according to CBRE Ireland.
The property specialists released their final bi-monthly report for 2020 on trends and transactions in all sectors of the property market with consultants describing 2020 as a ‘challenging and unprecedented’ year for the market.
The report points out that transactional activity in both the occupier and investment sectors of the market in Cork has understandably been subdued in the last few months.
However, CBRE pointed to the continued momentum in the development sector, with development progressing on several notable construction projects in the city and a number of schemes having secured planning permission including the 34 storey Tower development in the Docklands region, which will be Ireland’s tallest building when completed.
More than 6,500 square metres of new office accommodation is now available for occupation at The Counting House office scheme in the Brewery Quarter.
"Encouragingly, JCD Developments recently announced that 75% of their Penrose Dock office scheme is now leased, with Qualcomm, Cloudera and Varonis having taken occupation in this scheme alongside Matheson Solicitors and Grant Thornton," CBRE said.
Planning permission has also been received to add an extra floor to Block D in the Navigation Square office scheme in the city.
"In line with trends nationally, there have been few development land sales completed in the Cork market in recent months. That said, Round Hill Capital recently acquired a 1.5-acre site with planning for 412 student accommodation units at Bandon Road for €10.3 million.
Nationally, CBRE said the inability of international investors to travel to Ireland to inspect properties has had a significant impact on commercial property investment transaction this year.
The property specialists released their final bi-monthly report for 2020 on trends and transactions in all sectors of the property market with consultants describing 2020 as a ‘challenging and unprecedented’ year for the market.
According to CBRE, transactional activity in most sectors of the market was negatively affected as a direct result of the economic impact of the threat of a no-deal Brexit and the Irish Government’s response to Covid-19.
Retail vacancies have continued to escalate on prime high streets and in shopping centres around the country in recent months. "City centres have been particularly adversely affected due to the absence of students, office workers and tourists," CBRE said.
"While transactional activity is understandably limited in the current climate, the likelihood is that when new letting evidence emerges, prime headline rents will be between 10% and 20% below the Zone A rental values that prevailed at the beginning of 2020."
Transactional activity fell dramatically in the hotel property market during 2020 with very few properties having changed hands this year. However, CBRE report greater engagement and increased activity during the Autumn months. "Bids have been received for several hotels in the last few weeks, which should see some hotel transactions being completed in the early part of 2021, albeit some of these transactions will be structured differently to enable transactions to proceed."
CBRE said almost €2.4 billion was invested in the Irish investment market in the first nine months of 2020, compared to €3.3 billion in the same period last year.
"Although investors continued to seek out opportunities in the Irish market throughout the year and we saw some transactional activity occurring regardless, the inability of international investors to travel to the island to inspect properties posed a very real challenge and impacted investment transaction volumes."
The likelihood at this juncture is that Irish investment spend for the year as a whole will be close to €3 billion, which CBRE described as a 'decent result' considering the challenging market conditions.
