Cork city offices for less than build cost at €1.5m
Investors and occupiers looking to secure a foothold in Cork's strengthening office market have an opportunity to acquire a modern building for well below replacement cost in the city's south docklands.
Agents Lisney are quoting a guide price of €1.5m - or just €43.50 per square foot for the Cleve Quarter building on Monahan Road, just 1.5km east of Cork city centre.
Cleve Quarter is a detached, five-storey office building over an undercroft and basement car park. Built around a central service core incorporating a stairs, two lifts and toilets on each floor level, the eastern section of the first floor was previously sold to an owner-occupier which is now in separate ownership and excluded from the sale. The remainder of the building is vacant and is being offered for sale in one lot.
The building comprises 3,205 sq m (34,501 sq ft) of offices over five floors with each floor extending to 790 sq m (8,500 sq ft). The top/fourth floor measures 371 sq m (4,000 sq ft), is set back and has an external terrace.
The offices are mainly finished to a shell standard internally and each floor is subdivided. There are 30 car spaces in the basement and 55 surface car spaces to the rear.
The property is located within an established commercial location with Cleve Business Park on an adjoining site and the Tellangana House and Phoenix House office buildings nearby on Monahan Road. The building is being sold on behalf of Gearoid Costelloe of Grant Thornton acting as receiver.
With strong occupier demand for offices in Cork city centre and its suburban business parks, Edward Hanafin of Lisney believes the building will appeal to investors and possibly to an owner-occupier with a use for all or part of the building.
"This represents a superb asset management opportunity to acquire a well-located office building with parking for a fraction of the construction cost," Mr Hanafin says.
In an indication of both the existing strength and the potential of Cork's suburban office market, JCD is expected to commence the construction of 26,000 sq m (280,000 sq ft) of suburban offices at City Gate Plaza in Mahon shortly and has appointed Savills and Cushman & Wakefleld as agents.
Developer Michael O'Flynn's O'Flynn Group also has planning permission for two substantial suburban office developments at East Gate and Ballincollig but is unlikely to start building until he has secured a pre-let.
Gerry Wycherley meanwhile is expected to develop a new 6,500 sq m (70,000 sq ft) building at Site 2100, Cork Airport Business Park.
The returns available to investors in the Cork office market remain attractive when compared to yields in Dublin. Edward Hanafin expects demand for prime investment assets in the Cork region to remain strong, noting that prime office yields ranged between 6.5pc and 7.5pc at the end of 2016. He believes the city will continue to attract FDI occupiers as rents are competitive when compared to Dublin.