Cork Development Market Attracts New Interest

Last week we referenced the latest CBRE report on development land deals in Ireland, which showed that the combined value of development land transacted in Q1 was less than half the average quarterly combined transaction value over the last five years. However, the performance of the sector in the first three months of 2021 was actually on par with the same period in 2020 (€110 million, down from €112 million) so perhaps the five-year rolling average is not the metric by which to be guided when identifying trends in the marketplace right now.

Earlier this week, property editor with the Irish Examiner, Tommy Barker, published an article report that ‘Investment funds are becoming major players in [the] land development market’. This headline ran alongside a news story about Elkstone Partners, which emerged as the successful buyer of 105 acres of Nama-controlled land (Stoneview, near Blarney), reportedly paying 50 per cent over the initial €4.6 million price guide “to sew it up”, despite robust developer interest. 

Most people with even a passing interest in development will be familiar with the Stoneview lands, which are situated close to Blarney Business Park and, as the article puts it, “its long-proposed commuter rail station on the Mallow/Dublin line”. The lands were part of a 250 acre holding that was strategically and systemically acquired almost two decades ago by some of Cork’s best known developers. And the acquisition plan 20 years ago was indeed strategic, with Blarney now part of Cork City Council rather than Cork County Council, there has been a renewed focus on – and investment expected in –  infrastructure, including public transport. With Blarney expected to be one of the key beneficiary areas of the move to a more hybrid approach to working post-pandemic, the demand for new homes locally is set to increase further.

The above-mentioned article purports that “major investment funds sitting on huge cash piles are emerging as a force in the Irish land development market, combining site acquisition and speculation, as low-key and off-market multi-million euro deals transact during these pandemic months”. The reported strategy is for such funds to partner with local home builders and developers that are simply not in a position to compete in terms of securing the lands and developing them out. There is an element of knee-jerk reaction to this particular transaction so it certainly doesn’t constitute a trend – yet.

Finally, the article hints at more “even larger and more valuable” potential development sites   due to come to the market in coming weeks, including lands in the heart of Wilton, at Bishopstown and at Ballincollig. This will be an interesting market to watch over the coming months. 

Ian Lawlor
086 3625482

Managing Director 
Lotus Investment Group