Cork: Demand growing in the city for office and industrial units

Developers in Cork are gearing up for both offices and industrial projects thanks to healthy demand for accommodation in these sectors.

The office sector was encouraged by recent news that Varonis, a US data security and analytics company, plans to double its Cork workforce to 120 and take 3,577 square metres in John Cleary’s JCD development at Penrose Dock.

Despite the challenges posed by the pandemic, Penrose Dock now has nearly 90 per cent of its floor space let. The entire complex offers a total of 23,226 square metres of offices in two buildings. Its tenants, including a mix of global technology and professional services companies, employ over 1,100 staff, with plans to create a further 500 jobs.

Reflecting its confidence in Cork’s office market, JCD also recently applied for planning permission for a 16-storey development with 15,800 square metres of office space on the Carey’s Tool Hire site, Albert Quay in the city centre. These plans have replaced JCD’s previous plans for 201 apartments in a 25-storey development on the same site as offices were considered more viable for a high-rise, high-density project.

A spokesperson for JCD said rents of €350 per square metre are being achieved for new Grade A Cork office space.

Meanwhile, O’Callaghan Properties (OCP) told the Business Post that it hopes to commence construction of the third of its office buildings at Navigation Square (NSQ), by the end of the current year. It has already built two of the four blocks in the 33,445 square metre complex.

Recently, French property company, Corum Asset Management, acquired the NSQ1 building in Navigation Square on behalf of its Corum XL fund. This 11,241 square metre block is occupied by Clearstream DB which is part of Deutsche Börse Group, one of the largest exchange organisations in the world.

Corum’s acquisition was described as “a really positive endorsement for Cork and for the city’s Docklands” by Brian O’Callaghan, managing director of OCP. “Navigation Square was undertaken as a flagship, ambitious development capable of hosting large-scale multinational and indigenous investment projects within Docklands,” he said.

OCP is also in discussions with a number of parties, mainly in the tech and biopharma sectors, about letting space in the 7,432 square metre Block 2 Navigation Square and is quoting rents of €325 per square metre.

Between them, blocks 3 and 4 will offer more than 12,000 square metres internal floor areas and roof terraces with views of the city and port.

Meanwhile, near the main railway station, a joint venture between Clarendon Properties and BAM completed its first office block at its Horgan Quay development last November during the pandemic.

Extending to 8,547 square metres, No 1 has seen Spaces, the international co-working office provider, occupy 2,787 square metres. The fifth, sixth and seventh floors with a combined 3,345 square metres have also been let. Its last 22,323 square metres at the ground, Loft and second floor are subject to an exclusivity reservation.

A spokesperson says “enquiry levels for state-of–the-art city-centre office accommodation is encouraging. We are currently mobilising the site for No 2 (office block), which will provide 12,077 square metres of offices. We will have this building completed by the end of 2023.”

Last December, Paddy McKillen jr’s Press Up opened the Dean Hotel on the site. The joint venture is also close to completing the 1,580 square metre Carriage Shed which will provide retail, bar and restaurant facilities on the quay.

Such demand is welcome after the way in which Covid dampened the market with only four office lettings totalling 3,070 square metres in the first quarter of this year. The largest of these comprised a 1,380 square metre letting of the second floor of Unit 5100 Cork Airport Business Park to Poppolo, which exercised an option to expand in the building.

Reflecting the worldwide increase in demand for logistics and industrial space to cater for online deliveries, a number of Cork developers have also increased their activity in this sector of the property market.

JCD is about to commence construction on a 4,180, 4,645 and 5667 square metres Grade A industrial buildings at Blarney Business Park, to the north of the city. The developer recently secured DHL Express as an occupier for a new bespoke premises at the park. DHL’s 3,252 square metre facility, on a 5.5 acre site, is at an advanced stage of construction.

This is the latest occupier to commit to Blarney Business Park and more lettings are expected in the near future.

Meanwhile, Edward Hanafin of Lisney reports active enquiries for modern warehouse property. In spite of Covid, more than 25,000 square metres of industrial space was taken up in Cork over the last year and the vacancy rate has dropped to a historic low of 2.8 per cent, well below the typical equilibrium level.

“The increase in online retailing is one of the factors driving the demand for warehousing and Brexit has also been a factor,” he says.

He is also about to launch four industrial units at Watergrasshill Business Park, just off the M8 Cork to Dublin road about 20km north east of Cork city. These units range in size from 1,955 to 6,733 square metres on sites of between 1.8 and four acres. Their planning permissions include a two-storey office/service block with mezzanine floors in each building.

Lisney also recently launched a new warehouse development at Harbour Gate Business Park, Little Island, about 9km east of the city. It is close to the Waterford N25 and Dublin M8 roads with easy access to the Jack Lynch Tunnel which connects with the South Ring Road network providing access to the airport and Ringaskiddy Port.

Construction has commenced on Harbour Gate which has planning permission for four high-bay industrial units with a total floor area of 18,580 square metres. The new buildings are available for sale or to let with sizes ranging from 1,600 to 11,740 square metres.