Peloton backpedals on scale for its Cork City office building

Exercise equipment giant due to take smaller customer support space than previously planned after poor trading year and product recall

Wed, 29 Sep, 2021 - 19:00

Tommy Barker

GLOBAL exercise equipment giant Peloton has backpedalled on Cork city office plans it had earlier this year, for 70,000-80,000 sq ft of space, for c 700 employees.

Now, on the back of poor Q4 2021 financial figures, and some treadmill product recalls, it has scaled back its hunt for offices in Cork city.

Sources say it is currently seeking a significantly reduced presence for the moment, put at between 10,000 to 20,000 sq ft, with the option/scope to scale up to as much as 50,000 sq ft in the short to medium term.

But, despite the poor financials and a tapering off of demand for home exercise equipment, which had topped $1bn at the pandemic’s height, it’s understood Peloton is still committed to a customer support presence in Cork, with the search for offices in the city centre currently ongoing via retained agents CBRE.

The current demand for reduced space broadens the range of options available to Peloton, and the search is still city-based, it’s understood, although agents CBRE have declined to confirm details of the reduced space request.

Peloton had been advancing discussions on new offices at Cork’s Navigation Square, after news broke before summer of its wish for 70,000 sq ft, or more via CBRE, with Savills acting for developers O’Callaghan Properties. It’s still expected that Peloton will commit to Cork offices, by this year’s end, sources indicate.

The news of Peloton’s scaled-back offices requirement comes after Facebook also put on hold an inquiry for accommodation for up to 1,000 employees in Cork, where it currently has a subsidiary Oculus VR.

Meanwhile, as Peloton’s search may now be expected to be more broadly based, due to the smaller space being sought, one possibility now emerges, with south docklands offices recently available at Tellengana House, off the Blackrock Road and Monahan Road. Agents Siobhán Young and Peter O’Flynn of Cushman & Wakefield have just brought 19,433 sq ft of Grade A office accommodation to the letting market, on two floors of the private investor-owned Tellengana House.

The space has been vacated by fund services company Citco which has been a long-term tenant at Tellenganna, and which will continue to maintain other offices in the same building.

The space available after Citco’s lease on two floors expired is on floors 2 and 5, with flexible floor plates (from 5,000 sq ft to over 19,000 sq ft). Cushman & Wakefield guide at €24 per sq ft, and agent Ms Young adds that the space “has now been upgraded and refurbished for the benefit of a new occupier.”

Tellengana House was developed on lands sloping down to the docks quarter from the main Blackrock Road, previously owned by solid fuel company Sheehan & Sullivan, and included a large, period home which was demolished over a quarter of a century ago, having lain vacant for decades. The replacement, stand-alone office block on landscaped, inner suburban grounds, was designed by Wilson Architecture and has raised access floors, suspended ceilings, HVAC, three eight-person lifts, excellent fibre connectivity, staff shower and changing facilities, staff parking and electric vehicle charging points.

Other occupiers at Tellengana House include Citco, StorageCraft, Beechbrook Capital and HorganLynch, consulting engineers.

C&W’s Siobhán Young says that “Tellengana House provides occupiers with fast access to the city centre but with the added benefits of a suburban office location such as extensive surface parking and more competitive rental levels.’’