Public sector growth in Cork office property market demonstrates continued strength

New figures show a 19.4% increase in H1 2023 take-up, compared to the same period in 2022, with a total of 196,400 sq ft recorded. The Health Service Executive’s (HSE) expansion played a major role, contributing to 56% of the deals in H1.

One of the prominent transactions was at the Westfield Office Quarter, Ballincollig, where HSE leased 64,000 sq ft. This space, which was vacant since its completion in Q4 2019, stands as an exemplar of the positive changes in the market. Other noteworthy transactions include HSE’s acquisition of 35,200 sq ft at Building 4, University Technology Centre, and the relocation of law firm Ronan Daly Jermyn (RDJ) to 85 South Mall.

Analysing H1 2023, a total of 27 deals were completed, compared to 19 in H1 2022. The public sector dominated the scene, accounting for 56.2% of the space taken. Headline rents in Cork maintained stability at €32.50 psf, reflecting the consistent market trend over the last three years.

The development pipeline shows promise with significant strides made in 2022 as the total stock broke the 7 million sq ft mark. This growth was spurred by the completion of the first phase at City Gate Plaza in Mahon. With 128,200 sq ft expected to complete at Horgan’s Quay 2 by the end of the year, and over 3.1 million sq ft in proposed projects, the future looks bright for Cork's office market.

However, the vacancy rate for H1 2023 stood at 13.7%. This slight decrease from 14.3% in H1 2022 is attributed to factors such as the pandemic's effect on transactional activity and the delivery of new office stock.

Sheila Madden from Savills commented, "The resilience of Cork's office market is truly commendable, especially given the global challenges we've faced in recent years. The current trends, emphasizing health, wellbeing, and sustainability, underline the evolving priorities of tenants. The dominance of the public sector, combined with the emphasis on energy efficiency and sustainability, showcase the maturity and future-readiness of the market. The consistent take-up, rental stability, and anticipated growth paint a positive picture for Cork as a competitive office hub."

The city docklands' development and population growth signal a continued expansion of the market in the upcoming years, placing Cork on the map as a competitive alternative to Dublin and other major cities.