Cork’s Webworks office building guiding €16m

Block on long-term lease to semi-State Ervia with rent potential of €25/sq ft after review

A four-storey office building rented on a long-term basis by a semi-State company in the centre of Cork city is expected to attract considerable interest when it goes for sale from July 4th.

Agent Lisney is guiding €16 million for the Webworks at Eglinton Street, which is to be sold on the instructions of KPMG, receivers to the now defunct Howard Holdings. The building extends to 4,080sq m (42,963sq ft) and along with 44 basement car spaces it produces an annual rent of €800,000.

The guide price reflects a net initial yield of 4.6 per cent. However, with a significant rent increase expected at the next review due in May 2019, the present rent of €177 per sq m (€16.50/sq ft) could well be increased to at least €269 per sq m (€25/sq ft).

The Webworks has a further 10.8 years to run on its lease to Ervia, the semi-State company responsible for the delivery of Ireland's national gas and water infrastructure through its operating companies, Gas Networks Ireland and Irish Water. The building currently accommodates 340 staff.

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Margaret Kelleher of Lisney said office rental levels are under upward pressure in the city centre and suburbs, with increases witnessed in all locations over the past year. City centre rental levels for prime Grade A offices are currently about €350 per sq m (€32/sq ft).

New office developments are primarily focused on the city centre, with new developments planned for Navigation Square, Trinity Quarter, Horgan’s Quay and Penrose Dock.

The Webworks is located in the heart of the city close to One Albert Quay, The Elysian and City Hall.