Expanding and establishing businesses in the technology, financial services, retail, and serviced office provider sectors have driven activity throughout the year in office, industrial and retail in particular.

Some highlights from Cork’s 2022 property market performance include:
- The office market in Cork city and suburbs hit a milestone this year when it broke the seven million square foot mark for the first time
- Cork has emerged as a major player in the industrial property sector this year – with rents secured in some prime areas of the market almost on a par with those secured in Dublin.
- Cork city centre has rallied considerably this year with a number of prominent retailers opening on its main shopping thoroughfare Patrick Street.

Office Market
With over one million square feet of new office space having been completed since 2018, Cork broke the seven million square foot mark for the first time.

Cork city is now home to 1.5 million square feet of recently developed Grade A (top quality) office space, the largest of which are located on the quays: Horgan’s Quay, Penrose Dock and Navigation Square. Between them, these three schemes have delivered almost 600,000 square feet of Grade A space to the Cork market to date.

Three business sectors have emerged as the main occupiers of these desirable city centre commercial spaces:
1. Tech
2. Serviced Office Providers
3. Financial Services

In keeping with other cities, the serviced office market continues to develop its presence in the Cork market - with providers in Penrose Dock, Horgan’s Quay and Navigation Square. The flexible workspace company, Iconic Offices became the most recent entrant in September, at 2 Navigation Square.

Cork’s quays are also marked by several big-name tech companies. 2022 saw a mix of new entrants - such as NetApp and Cadence joining existing occupiers like Apple, which has expanded its operations in Cork in recent years to Horgan’s Quay. The largest Cork city centre office deal of 2022 was the lease of over 28,000 square feet – which amounts to two floors - of 2 Navigation Square with Net App.

Outside of the city, in Mahon, the relocation of Logitech to a new state-of-the-art office building developed by JCD Group in City Gate Plaza, was a huge boon for Cork. Logitech has global revenues in excess of €5bn per annum and employs more than 8,000.

The Cork office market is also experiencing the growing “flight to quality” inclination of employers as they move their operations to Grade A developments. It is expected that prime rents will have to increase to reflect the high level of such office space being delivered to the market.
As it stands, there is a further 200,000 square feet of Grade A office space under construction in the city at present – at The Prism and 2 Horgan’s Quay developments.

Industrial Market
Cork’s industrial market has seen a vast amount of activity in recent years - with over 460,000 square feet of new industrial buildings completed since 2019. Almost half (46pc) of these were pre-let prior to completion - with the remainder agreed soon after. The industrial vacancy rate currently runs at 1.82pc and has been consistently at this level for several years now. Prime rents for existing buildings are at €10.50 per square foot - and trending upwards.
A significant difference in the Cork industrial market compared to other sectors of the commercial property market is that there is very little difference between the prime industrial rents achieved in both Cork and Dublin. Dublin prime headline is at €11.75 per square foot. Furthermore, a minimum lease term of ten years is now standard for prime stock.

Retail Market
Considering the negative impact Covid and lockdown restrictions had on the retail market nationally, Cork city centre has rallied considerably this year with a number of prominent retailers opening on Patrick Street in the last three months alone. Dune and The North Face both opened standalone stores, while Eason’s relocated to the redeveloped former Victoria Hotel on the corner of Cook Street and Patrick Street. The Cook Street area is also set for major redevelopment should the planned Penney’s expansion finally secure permission to go ahead. Flannels – which is part of the Frasers Group – is due to open in 2023 on 113-115 Patrick Street.
The former Debenhams store, which extends to over 150,000 square feet, recently went up for sale with a guide price of €20 million. This sale is hugely important to the city and it is vital that this iconic building is developed and re-occupied as soon as possible.
Mahon Point shopping centre on the suburbs of the city continues to lead the way as the go-to regional centre, with retail giant Frasers beginning trading in early November 2022 and Sports Direct operating on the upper floor since November 2021.
One of Cork’s other suburban shopping destinations, Douglas Village shopping centre, is currently on the market with a guide price of €21 million, with offers submitted in early November and a sale reportedly agreed.
While challenges remain in the retail sector, prime locations retain the interest of new entrants to the market and this supports the demand for retail space in Patrick Street and Opera Lane.

Development Land
Despite the constant demand for housing, the development land market in Cork remained relatively subdued this year. This is expected to have a knock-on impact on other sectors as concerns remain around the lack of housing nationally. The most significant transactions this year were the 3.3 acres deal in Blackrock and the 0.9 acres one in Model Farm Road. Both have residential development potential and achieved in excess of €1.2 m and €2.9m per acre respectively.

The land market has been sluggish during the year with increased build costs and rising interest rates being the most significant concerns for developers. The current level of completed transactions of significant land banks with or without the benefit of planning permissions does not augur well for ongoing delivery of housing to the Cork market. Most of the onsite activity over the coming year will be much needed social and affordable housing but there are concerns around the delivery of private city centre stock and development starts in the suburbs. The viability of city centre apartment development not only in Cork but Nationwide remains the biggest issue facing Government at present and some intervention is required in order to stimulate activity.

Investment Market
In Cork’s investment market, we continue to see good interest in prime stock with investors recognising the dynamics of the Cork market - across all sectors. While investors may have taken a more cautious approach in the last three months of 2022, the sale of Riverview Business Park for €10m and recent deals on Patrick Street reflect ongoing demand.

Outlook
While Cork will not be immune to the economic headwinds hitting the country, we expect 2023 to reinforce Cork as a City that is growing and the hope that we will start to see the seeds of the URDF funding of €350m take place which should trigger further development in the region.