A high-quality office building owned by Quest Software International Ltd, at City Gate Park in Mahon, Cork, comes on the market this week on a sale and leaseback basis quoting €21 million. The terms include a new 15-year lease at an annual rent of €1.6 million. This will provide the new owner an initial yield of 7 per cent.
Agent CBRE is to handle the sale at the Cork office campus in the expectation that it will appeal primarily to Irish institutions and European funds.
The four-storey Block C has a gross floor area of 8,119.6sq m (87,309sq ft), which equates to €197 per sq m (€18.30/sq ft). It has a concrete frame construction with a glazed aluminium curtain walling and polished limestone finishes.
The main reception is on the ground floor along with open- plan offices and meeting rooms. The first and second floors also feature open-plan offices and a kitchen, while the third floor has further offices, larger meeting rooms, wraparound balconies and a communal canteen. The block also includes a basement car park with 180 spaces.
City Gate Park was developed by John Cleary in 2012 and has an overall capacity of 27,870sq m (300,000sq ft), and more than 500 car parking spaces. Occupiers include Dell EMC, McAfee, Qualcomm, FireEye, Voxpro and solicitors Ronan Daly Jermyn.
City Gate Park is about 5km southwest of Cork city centre, close to the South Ring Road network, which offers easy access to Cork Airport and the main arterial routes. The office park is also within a short drive of Cork’s largest shopping centre, Mahon Point.
Quest Software helps solve technology and security problems. In 2017 it had a turnover of $389 million (€330 million) and a net profit of $26.7 million (€22.6 million).
Brian Edwards of CBRE said that, just like Dublin, the Cork office market had experienced a good recovery. Strong office demand, coupled with a lack of development for several years, have resulted in rising rents and low vacancy rates. Prime city centre office rents are now €350 per sq m. And a feature of the Cork office market over the past 12-18 months had been a strong shift in demand away from business parks towards urban centres such as Mahon.
According to Natalie Brennan of CBRE Dublin, of the €2.5 billion traded in the Irish investment market in 2017, office investments accounted for 37 per cent of the overall spend while regional transactions accounted for 16 per cent.
CBRE said there have been 74 investment transactions in the Cork market since 2015 at a value of €555 million. In 2017 alone, the market recorded €187 million in investment transactions, up from €56.5 in 2016.