Cork City is currently experiencing increased development of offices, hotels and student accommodation. However, the city has had little to no new apartment developments despite increasing employment and rising residential rents unlike the upsurge in rental construction developments in Dublin.
isney reports four new office projects currently under construction in cork with a combined floor area of 27,000 m² (290,625 square feet) and most of this space has already been occupied, reflecting strong occupant demand.
O’Callaghan Properties is developing Navigation Square on Albert Quay, the largest development under construction. Its block A will cover 13,800 m² (148,542 square feet) and has been leased to Clearstream. Another 15,600 m² (167,917 ft²) in Block B has started and is expected to be completed by the end of 2019.
The city’s most active developer, John Cleary Developments (JCD), is due to complete 4,600 m² (49,514 square feet) of office space at 85 South Mall in the first quarter of next year and has already leased it to consultants in KPMG business, with US The cybersecurity company Forcepoint occupies the first and second floors.
Earlier this month, work began on the site of JCD’s Penrose Dock development in the downtown area, which will offer a total gross floor area of 39,992 m² (430,470 square feet), including the sub -floor and 23,000 m² (247,570 square feet) of office space across two buildings. The work is expected to take approximately 18 months.
The 6,700 m² (72,118 square feet) facility at 3 Eastgate Drive in Little Island east of town, which O’Flynn Construction is developing and pre-leased to US pharmaceutical company Eli Lilly, is also expected to to be completed early next year.
12 other projects have planning permission for a combined area of 162,400 m² (1,748,059 square feet) including seven in the downtown area, three in the southern suburbs and one in the western and eastern suburbs.
These include Clarendon and BAM’s head office at Horgan’s Quay with 28,700 m² (308,924 square feet) of office space; JCD’s City Gate Mahon with 26,000 m² (279,862 square feet); Westfield Office Quarter in Ballincollig with 24,500 m² (263,716 square feet) and Trinity Quarter in the city center with 22,700 m² (244,341 square feet).
Margaret Kelleher of Lisney says that there are two other developments currently in the planning system, namely the 5,500m² (59,201 square feet) prism on Clontarf Street and 17,000m² (182,986 square feet) across two buildings on the former Ma / Comm site in the suburbs of Mahon.
Meanwhile, Denis O’Donoghue of CBRE says there are up to 1,500 hotel rooms in the works in five projects. These include the upcoming opening of the 163-bed Maldron Hotel on the South Mall. Nearby, BAM is building a 220-room hotel at Sullivan’s Quay.
On MacCurtain Street, Trigon Hotels Ltd, owner of the Metropole Hotel, plans to increase its capacity to 400 rooms, including the addition of a new city hotel called “The M”. This will bring the number of hotels owned by the Alvarez family in Cork to four, including two at the airport.
Joint developers Clarendon and BAM have started work on their new hotel at the head office on Horgan’s Quay near the station. Across the river near the bus station, Dublin-based company Tetrarch Capital has applied for a building permit for a 165-room hotel at 7-9 Parnell Place.
O’Donoghue says the city’s tourism industry will benefit from the development of the new event center at the former Beamish & Crawford brewery site. It will also help support ongoing student housing developments in the city, as they will complement the supply of summer tourist accommodation when students are away.
The latest student project will see London-based Future Generation undertake a 600-bed space project at a site it acquired in Carrigrohane Straight Road, close to UCC and the Cork Institute of Technology. Closer to the university, in The Lough, another developer, Lyonshall (Bandon Road) Ltd, has reportedly requested permission to increase the size of an approved project from 98 to 418 student spaces.
But a lack of apartment development has raised concerns among Cork businessmen. In a recent interview, John Mullins, president of the Port of Cork, told the local newspaper Evening Echo: “The problem is, we haven’t built apartments for a very long time, the only things being built are are student accommodation… do anything for returning emigrants who want homes for their children or for foreign nationals who want to work here in new jobs in places like Apple and EMC. They all struggle to find a place to live.
“My feeling is that the biggest threat to the economic growth of our region is the lack of housing supply. Think of tradespeople, for example. How are you going to attract an electrician, installer or plumber from Australia or Canada again if there is no housing? ”He added.
Despite an increase in average residential rents in the city of 4.9% in the second quarter of this year to € 1,123 per month, developers are not attracted by returns on apartments.
Denis O’Donoghue points out that even with two-bedroom apartments of 93 m² (1000 square feet) whose rent is € 1,800 per month, a real estate developer would only get an annual rent of € 17.28 per m². . “This is well below the 33 € per m² that a developer can obtain by renting prime offices in the city center,” he explains.
“The government must reduce the VAT by 13.5 pc in order to make the development of apartments in the city center more attractive”, he explains.
“The development of downtown apartments would not only increase the housing supply, but also increase the vibrancy of the downtown area at a time when online retail activity poses increasing challenges for stores and businesses. shopping streets, ”he adds.
On the flip side, Cushman & Wakefield predicts that Cork’s prime office rent increase rate will slow from 11% growth in the 12 months through September of this year to 1 , 4% next year, which could help reduce the gap between rents in the two sectors.