Cork is in the process of being transformed into a real rival to the capital
I was in Cork last Friday to speak to the DPS Group, the engineering and project management specialists, and I took the opportunity to invite a group to discuss the issues affecting property and construction in the city.
My experts were Aiden O'Dwyer, director of DPS Group's operations in Cork, Isobel O'Regan, commercial director with Savills, and Dr Brian Turner, economics lecturer at UCC. I soon learned that Cork is approaching a 'tipping point' to a new and exciting, self-sustaining scale.
There is a wave of property and infrastructural development in the city, which, if handled correctly, can transform Cork as a place in which to live and work. The most important of these is the relocation of the port of Cork from the city centre. Roll on-roll off (RORO) ferries are due to join the passenger ferries at a new port at Ringaskiddy. This opens up exciting development sites for offices and apartments on both sides of the river - similar to the Dublin docklands.
Prime property is in demand and John Cleary's office scheme at 1 Albert Quay saw 16,250 sq m (175,000 sq ft) let at final rents approaching €296 per sq m, and the investment sold to Green REIT. Cleary is due on site next month at City Gate Plaza, Mahon, an office scheme of 25,000 sq m (270,000 sq ft). Isobel O'Regan advised that prime city rents are now at €323 per sq m.
Cleary is also close to completing The Capitol, a 10,000 sq m (108,000 sq ft) retail and office scheme on Grand Parade, where three quarters of the space is pre-let. O'Callaghan Properties are awaiting planning permission for an office scheme of 32,000 sq m (345,000 sq ft) at Albert Quay, and intend to go on site this year.
Other schemes include Kent Station, a joint venture between BAM and Clarendon Properties, on a 2.5 hectare site. CIE sold the 'air rights' for a 10pc share of the income. The scheme, to provide offices, apartments and a hotel, is now being master-planned. O'Flynn Construction have just announced that they are to build 184 houses in an €80m investment.
My group felt this is a crucial time to get planning, infrastructure and 'joined-up thinking' right. Everyone identified the two major infrastructural blockages in Cork as the Dunkettle roundabout and the N28 (Cork to Ringaskiddy) road. The Dunkettle roundabout is adding 15 minutes each way to journeys into the commercial area of Little Island.
Aiden O'Dwyer pointed out that with a lot of heavy pharma business and future pharma infrastructure to be developed around Ringaskiddy, better access is needed to open up sites. It was noted that the N28 runs through Housing Minister Simon Coveney's constituency, and that his possible elevation to Taoiseach would do no harm to the prospects of getting the new route built.
However, O'Dwyer cautioned that the current Dunkettle roundabout configuration is relatively new infrastructure, which underlines how infrastructural planning has to be got right, first time, for this next burst of development.
Cork is very strong in the pharma and IT sectors and Apple, and others, are currently investing heavily. O'Dwyer said these sectors are watching the 'Trump factor' carefully, as any clampdown could have a big effect. There is a potential short-term wave of development to get projects to the stage where it wouldn't make sense to stop them. Brexit is an uncertainty factor, but more so in agriculture, where Kerry Group and Dairygold are big players in the region.
Brian Turner pointed to reduced air connectivity as a problem, and all agreed that the old Cork airport terminal should be leased on soft terms to a low-cost operator. Norwegian Airlines' new flights to the US were welcomed, although there will be more flights from Shannon than Cork.
My contributors praised the Tyndall ICT research centre and the Ignite business innovation programmes attached to UCC, which are seen as the way to a future that isn't overly reliant on FDI. Cork is at the dawn of a new era, which must be managed skilfully.
As Isobel O'Regan concluded: "Cork has much to offer, and is growing fast as a European scale city."