The most significant property sale so far this year in Cork city hits the market this week with news that O'Callaghan Properties is seeking to offload its Half Moon Street development.
It is on the market at €34 million through joint agents Savills and CBRE. Given that it produces a rent roll of about €2.6 million, any sale at the guide price would reflect a net initial yield of 7.07 per cent. Similar assets in Dublin are transacting for returns as low as 4.5 per cent in some cases.
Half Moon Street, in the heart of the city centre, has an attractive waterfront setting at Lavitts Quay and is adjacent to the Crawford Art Gallery and Cork Opera House. It is within walking distance of Opera Lane and Patrick Street, Cork’s prime retail offering.
Developed in 2009 by O'Callaghan Properties and designed by Wilson Architects, the scheme is anchored by Apple Europe and Boots pharmacy's flagship Cork store.
The building extends to 11,110sq m (119,589sq ft) of retail and grade A office space. Tenants include Henry J Lyons – one of Ireland's leading architectural practices – clothing and footwear retailer Matthews, and Kopper Hair Salon.
Potential
Apple rents its space at €22 per sq ft – well below current market levels of €32.50 per sq ft. Kyle Rothwell of CBRE believes the office space leased to Apple offers "significant asset-management and reversionary potential. This will appeal to firms looking for strong value-add potential."
Letting vacant retail space at the ground and lower ground floor level could also increase the rent roll. Tenancies at Half Moon Street have a weighted average unexpired lease term to break option of 4.12 years and to expiry of nine years.
Cork city is undergoing about €300 million worth of investment in its office, retail, hotel and residential markets. The Ireland Strategic Investment Fund recently announced it is to invest €35 million into a new Quadrant-managed fund that will finance up to €120 million of office space in Cork city.
O’Callaghan Properties, which is developing Cork city’s largest office complex at Navigation Square, says the sale of Half Moon Street will “position Cork as a high-quality investment location for institutional investors”.
