Cork city apartment plans scrapped as not financially viable

JCD Group's plans for a 25-storey apartment development turned out to be financially non-viable while demand for offices has increased in the city

JCD Group is proposing a 16-storey office tower on the former Sextant bar and Carey Tools site on Albert Quay, Cork City. The group scrapped plans for a 25-storey, build-to-rent apartment development, saying the rent level required to make the project financially viable ‘is not sustainable in the Cork market’.

Plans for a 25-storey apartment development in the heart of Cork city have been scrapped as being non-viable financially, with the quayside site set to become a 16-storey office block instead.

Noting much stronger than expected take-up of offices in Cork city, despite the setbacks of Covid-19, developers, JCD Group, has applied to Cork City Council for a totally revised proposal for a 170,000 sq ft office tower on the former Sextant bar and Carey Tools site on Albert Quay.

It would be double the height of any previous offices schemes in Cork city centre, and just a floor under the height of the 2008-built Elysian apartment tower.

Planning had been granted to JCD a year ago for a 25-storey ’build to rent’ apartment development.

The offices will be set between the JCD-developed One Albert Quay and O’Callaghan Properties’ Navigation Square.

Planning had been granted to JCD a year ago for a 25-storey ’build to rent’ apartment development.

But, following a detailed appraisal process and review by Deloitte, it was found that even at existing high market rents “the cost of delivering the project is 15% higher than the anticipated value on completion, making the project completely unworkable,” said the company.

Rents required to make the 201-apartment project financially viable would have had to rise an average of 21% from current levels, to as much as €2,800 per month for a two-bed unit, which JCD say “is not sustainable in the Cork market”. 

The developers say the new office tower proposal has been designed to blend with other tall structures proposed such as the 34-storey hotel proposed for the Port of Cork site and the slender Prism office tower, of 15 storeys height, by the bus station, both backed by US-based developers.

JCD’s proposal includes a public plaza which allows for the refurbishment of a former rail line’s old ticketing office and railway terminus on Albert Street and Albert Road, to be converted to a bar and restaurant, as well as a cafe/deli on the ground floor of the new office building.

Aerial view of the 16-storey JCD office tower planned for Albert Quay at the grounds of the old Sextant Bar.

News of the change of use comes as JCD Group moves towards full occupancy of their Penrose Dock 250,000 sq ft office development, which won an Irish Building of the Year Award last week, with 90% taken up already. 

A recent study by agents Cushman & Wakefield has shown that, despite a global pandemic, the take-up of top ‘Grade A’ office space was 15% higher in 2020 than the average over the last decade.

John Cleary, CEO of JCD Group, said: “We have been very encouraged by the resilience of the demand for new grade-A office space in the city over the last 12 months, particularly in relation to US technology companies, both existing and new entrants.” 

Up to 5,000 people currently work in JCD Group-developed buildings in Cork.

“We see an exciting opportunity for smaller cities in Europe such as Cork to attract further investment in a post-Covid world and for this to happen we need to continue to invest in best-in-class office space. 

"We see Cork competing and winning on an international stage for new investments given the talent pool and the cluster of international companies already here,” he added.