Property prices and rents on the slide in Cork
The pace of decline in Cork city centre commercial property prices and rents has begun to gather momentum.
Rents for prime city centre offices slipped 12.3pc in the last six months as vacancy levels for the city and suburbs rose to 21.1pc by March this year. These are among the findings in the latest DTZ Sherry FitzGerald quarterly survey of the Cork commercial property market.
Prices and rents for industrial properties are down by about 30pc compared to 18 months ago. Industrial prices now range between €1,250 and €1,460 per sqm in one of the more sought after areas, the south-eastern suburbs.
Office take-up during the first quarter of this year was only 1,550sqm, but nevertheless it marked a second successive quarterly reduction in availability, to 109,400sqm at the end of March.
A single letting at Bowler House in Blackpool to a library accounted for approximately 72pc of the space taken up during the quarter. The remaining space comprised small sized deals.
A comparison with the previous quarter reveals a reduction in activity levels equating to 76pc as underlying demand remained weak following ongoing weaknesses in the wider economy. The total quantity of space taken up in the 12 months to the end of March stood at 31,000sqm.
A comparison with the same period in 2009 reveals a 36pc increase in transaction activity, including the occupancy by Sheehan Healthcare of approximately 13,900sqm at City Gate last year.
Two positive aspects of recent trends include a continuation of the slowdown in the quantum of second-hand office space released to the market, as well as the absence of any new developments completing construction during Q1.
An analysis of the spread of available office space reveals that the suburbs continued to account for the majority of accommodation, 66pc, with the city centre accounting for the remaining 34pc.
Industrial take-up during Q1 amounted to 4,350sqm, which reflected a notable increase in the quantum of space and the number of deals compared to the corresponding period of 2009. As much as 2,700sqm of this space was reflected in two deals on Little Island units.
On a positive note, enquiry levels have increased -- although prospective occupiers are more reluctant to commit. Over the 12 months the north-east suburb of Cork absorbed 46pc of the transacted industrial space and rents there are slightly lower, ranging between €60-€70 per sqm.