€2.25m for Cork office block occupied by AIB

With investors now looking outside Dublin for better value in office investments, DTZ Sherry FitzGerald is expecting considerable interest in a modern AIB-occupied building just off the South Mall in Cork city centre.

Peter O’Flynn of the agency is guiding €2 million-€2.25 million for Mathew House on Father Mathew Street which is used as a business centre by the bank. The modern building extends to 1,436sq m (15,446sq ft) over six floors and is currently producing an income of €196,936 under a lease which runs to 2022.

The block has a range of third-generation features including raised access floors, suspended ceiling, air conditioning, quality lighting and modern IT cabling. The building is regarded as a strategic business centre for AIB in the Munster region and is located close to the regional headquarters on South Mall.

With a limited supply of modern office accommodation available in Cork city centre, rents are expected to rise in the coming months because of pressure on supply.

Increased demand
Mathew House is rented at €137 per sq m (€12.75 per sq ft). The pressure on rents in the city has stemmed from increased demand including that from foreign direct investors and the absence of speculative schemes over the past six years.

The recent letting of the Webworks building on Eglinton Street to Bord Gáis at €193 per sq m (€18 per sq ft) underlines the changes taking place in the Cork market.

Irish Life recently acquired office investments in City Gate Park for between €35 million and €40 million while advanced negotiations are under way on the sale of phase 2 of Cork Airport Business Park for a price above the reported price tag of €13.5 million-€14 million.