The expansion of the Health Service Executive’s (HSE’s) Cork footprint contributed significantly to growth in the city’s office market in the first six months of the year, according to Savills Ireland.
Headline commercial rents remained stable in the first half of 2023, the property agent said in a report on Tuesday, despite vacancy rates remaining well above pre-Covid levels.
Some 13.7 per cent of available space in the city was vacant over the six months to the end of June, down from 14.3 per cent over the same period last year. However, this remains well above pre-Covid levels with rates of between 8 per cent and 10 per cent recorded in 2018 and 2019, according to the report.
Savills said the HSE’s take-up of the Westfield Office Quarter in Ballincollig after two years of negotiations contributed to the reduction in vacancy rates from the first half of 2022 to 2023.
The HSE has agreed to take up 5,945sq m (64,000sq ft) at the scheme, which had been vacant since its completion in 2019. The agency also acquired 3,270sq m (35,200sq ft) at the University Technology Centre over the period.
Other notable transactions included the relocation of law firm Ronan Daly Jermyn to 85 South Mall.
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Overall, Savills said a total of 27 deals were completed in the first half, up from 19 last year while take-up jumped more than 19 per cent and more than 18,240sq m (196,400sq ft) of space leased.
With the HSE’s activity accounting for more than half (56 per cent) of leasing activity in the first six months, the public sector remained the dominant player in the Cork office market.
“The dominance of the public sector, combined with the emphasis on energy efficiency and sustainability, showcase the maturity and future-readiness of the market,” said Sheila Madden, research analyst at Savills Ireland. “The consistent take-up, rental stability and anticipated growth paint a positive picture for Cork as a competitive office hub.”
Shaking off the impact of the pandemic, Cork’s office development pipeline “shows promise”, according to the report. Some 11,910sq m (128,200sq ft) is expected to complete at Horgan’s Quay, a joint Clarendon Properties and BAM Ireland project, by the end of the year and a further 3.1 million sq ft in projects has been proposed.
