‘New arrivals have more confidence’ in Cork

MORE investors are getting out of the housing market in Cork than are buying into it, at a time of unprecedented demand for rental properties, with no new supply of any scale, a gathering of the construction sector has been told.

The CIF Business Breakfast Briefing titled 'Cork Construction and Development Opportunities 2018'. Picture: John Sheehan Photography

An analysis of property sales up to September 2017 showed 34% of sales were by investors leaving the market, and just 22% of purchases were for rental invesment, said Cushman & Wakefield director Frank Ryan, citing Sherry FitzGerald research.

And, after major international players have entered the multi-family unit market in Dublin and move on to other cities, local contractors and builders were told at a CIF business briefing that they should prepare to build for this new element in housing supply, in joint ventures with plcs, funds and Nama.

In a hard-hitting and far-reaching address, the vastly experience C&W surveyor and housing analyst noted improved confidence and sentiment in Ireland’s recovery, particularly among overseas investors and FDI: “New arrivals have more confidence than we do. Cork is changing, and the surprise is just how fast it is,” Mr Ryan stated.

He added that the drive was from global players, not local ones. He predicted growth for an urban area, 20km around Cork city in the next few years, and forecast that the docklands 350,000 sq ft Navigation House office scheme “will fill up rapidly”, with two thirds of FDI space demand in Cork now city centre-based.

After a period of post-Trump and Brexit investment stand-offs, within a few weeks of one another, three very substantial FDI arrival decisions in Cork’s favour had recently been taken.

“All three changed at the same time, unrelated to one another,” he revealed, and said the strong imperative for these major player was certainty of delivery/timing, and not rents.

That market wants new, wants quality, and will pay for it, he said, expecting a gulf to open between new city office rents of €30-€35 psf, and half that for suburban development and half that again for Georgain buildings.

With the focus trained on the urban area and new-builds, the city is now a strong employment base. And, as retail will continue to adapt after the onslaught of online shopping, he suggested residential accommodation should now be supplied above retail buildings, and in converted, older office buildings.

Social housing, said Mr Ryan, was shut down by the Department of Finance in the 1990s, and the private market closed down in 2009. Neither sector has supply since and “it’s going to stay terrible for a year or two more”, Mr Ryan accepted.

He tipped Kennedy Quay and Kent Station east as short-term growth areas, but noted flood surveys would hamper south docks development, and the Seveso directive would similarly impact on Tivoli once port activities relocate.

Cobh, Blarney and Little Island are outlying areas for new homes supply, as well as the city’s emerging Marina Park.

Tourism, too, is a form of FDI and Cobh’s pick up on cruise line traffic could stimulate demand for a ‘Kildare Village’ type retail investment, and while there’s market rumbles of just such a scheme around Fota, Mr Ryan suggested Blarney could be a suitable location for such a discount retail compex.

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