COLLIERS INTERNATIONAL 2 Version Control Status FINAL Project ID 13681 Filename/Document ID Cork City Harbour FINAL RH PL JN 291112-1220 Last Saved 01 March 2013 Owner Roger Hobkinson Director Roger Hobkinson Approved by Michael Donohoe Date Approved 29 November 2012 COLLIERS INTERNATIONAL Company registered in Ireland: 20138 Registered Office: Hambleden House 19-29 Lower Pembroke Street Dublin 2 Tel: +353 (0) 1 633 3700 Tel: +44 (0) 20 7935 4499 CONTACT Roger Hobkinson Director | Destination Consulting T: +353 (0) 1 633 3759 M: +355 (0) 87131 6764 E:


COLLIERS INTERNATIONAL 3 TABLE OF CONTENTS 1 Executive Summary 5 1.1 Headlines, Findings and Recommendations 5 1.2 Early Actions Required 8 1.3 Describing Cork City Harbour 8 2 The Backstory 11 2.1 A Cork Strategy for Economic Recovery 11 2.2 The Project’s Context 11 3 Economic Recovery 13 3.1 Cities Drive Economic Growth 13 3.2 Connected Cork 15 3.3 Living in Cork 16 3.4 Cork Business 18 3.5 Rebalancing Economic Growth Locations 26 4 The Vision 30 4.1 Cork City Harbour – What could be Achieved 30 4.2 Picturing the Vision 32 5 The Delivery Strategy 39 5.1 Old into a New Public Assets 39 5.2 A Delivery Structure 41 5.3 Strategic Issues 46 5.4 Projects to Start 49 6 Selling Cork 55 6.1 Cork City Harbour 55 6.2 Changing Perceptions 56 6.3 Integrated Cork 58 7 Conclusions 61 7.1 Actions: Broker, Fund and Champion 61 7.2 Benefits 61 8 Report Information 63 8.1 Structure of our Overall Reporting 63 8.2 Thank You 63 8.3 The Consultant Team 65


COLLIERS INTERNATIONAL 5 1 EXECUTIVE SUMMARY 1.1 HEADLINES, FINDINGS AND RECOMMENDATIONS A multi-disciplinary team has prepared a major study, part Government funded, on the Cork Docklands for Cork City Council. Commencing in February 2012, this study has identified the following: 1.1.1 MARKET DRIVERS  Generating employment (whether FDI-based or Irish owned), in the growth sectors that the Government’s job strategy pinpoints, is going to need more and more locations meeting specific business requirements. This demand from business is increasingly for office products located in dynamic, attractive city centre type areas with an excellent urban environment plus high quality accessibility.

These jobs are likely to be in International Traded Service business functions and activities (Knowledge Process Outsourcing and Manu-Services) and in the sectors where the Cork Region has strong education and R&D poles of excellence that can deliver advantages for businesses in ICT, Health and Life Sciences, Agri-Business, Energy and Cleantech.  The need for a high quality City Centre type location reflects the nature of business activities and jobs that Ireland is now attracting and should continue to attract in the future. It also reflects the urban location preferences of the generation that is starting to increasingly dominate the workforce and which businesses are targeting.

This is the demographic group known as Generation Y. In Ireland and other mature economies, a clear trend is business and employee preferences for an attractive urban experience and offer to work, live and socialise in.

For example, Google wanted to be in Dublin City Centre for sound business reasons – office space, high quality broadband connectivity and a large supply of a talented domestic and international workforce. If Google wanted to be in Cork City Centre, it would not have a comparable offer for them.  It has also been identified that Ireland’s regional cities, Cork probably most immediately, have major potential to strengthen Ireland’s offer internationally, complementing Dublin. In what is now presented as Cork City Harbour, predictions are for up to 7,000 new additional jobs being catered for within ten years.

However this can only be achieved if the right conditions are met; this requires priming by Government.

The view of IDA Ireland and the consultant team is that right now, the Cork City Harbour area, indeed the wider City Centre, does not offer the type of real estate Colliers International Brady Shipman Martin DKM Economics Mott MacDonald


COLLIERS INTERNATIONAL 6 (site, buildings and context) solutions to attract and accommodate current and emerging demand. This is for new ‘smart workplace’ investment. Cork must continue to modernise and develop a stronger City Centre offer and experience. Cork City Centre needs an on-going programme of product development and refreshment to build upon recent successes at St Patrick Street and Lapps Quay.

Without further modernisation, and with continued dispersed development into suburban and greenfield locations on the City periphery, the City Centre area will slowly decline - presenting more significant physical and social regeneration requirements into the future. That coupled to risk aversion in the private sector and capital scarcity in the public sector means that, without intervention, the status quo will not change.

The Cork City Harbour area also has the benefit of growing Irish owned SME's in and around the area. For example Marina Commercial Park has around 1,000 existing jobs, plus there are likely to be more high value spin-offs from the R&D and educational institutions such as the Tyndall National Institute, Rubicon, Nimbus Centre, UCC, CIT and IMERC.  The opportunity is for the State, through various companies and authorities, to help bring forward development. The State controls or influences large areas of prime real-estate in Cork City Harbour that is pivotal to positioning a competitive offer that IDA Ireland, Enterprise Ireland, indigenous businesses, developers, investors and property advisors can work with.

This potential will never be realised without concerted pan-Government action.

1.1.2 STRATEGY AND RECOMMENDATIONS  This report centrally recommends that Government backs the establishment of a new Cork City Harbour Delivery Partnership. That, working with existing interests such as Cork City Council, Irish Rail/CIE, NAMA, Port of Cork and other key landowners, has a charter, that central to it, delivers the unlocking of state land assets, resources and the capacity as part of a pan Government approach. The cross cutting theme of which is to achieve a rebalance of development and economic activity towards Cork City Centre.

There are various delivery structures or vehicles that could be mandated to leverage private sector finance and enterprise activity on the back of the unlocked state lands assets, resources and capacity.

The aim is to manage risk and return for both the private and State sectors, to the point where investment would be forthcoming to deliver the development that is needed within the next three to five years.  For example, one option is a local asset backed vehicle or “LABV”. This is a mechanism (operational and at planning stage in British local authorities and state sector), with the aim being to release public sector land and property


COLLIERS INTERNATIONAL 7 assets and pooling them with private sector resources to kick start development.  The good news from an exchequer position is that the Cork City Harbour project does not require major up-front capital investment. The project is now conceived as focusing on existing assets, infrastructure, services and areas of energy in the adjacent core City Centre. Such an approach can support a significant level of development. Where the public sector is strong, carefully targeted investment in job intensive, shovel-ready projects like streetscape and environmental improvements, traffic management, cultural projects, pedestrian and rail station links can be quickly rolled out, improving perceptions and creating an attractive offer and environment for investors.

Allied to the delivery structures, work needs to advance on wider measures to ensure the Cork City Harbour area is maximising its contribution to the Government’s job strategy. Measures to support this include:  The costs of high quality broadband being competitive across the State.  A clear and strong Cork place brand and marketing strategy that helps elevate the Cork Region internationally for the benefit of all.  Targeted well thought out financial instruments with strong governance to support development and occupation in Cork City Harbour and the wider City Centre. Helping to deliver a rebalance of development and economic activity in the City.

In the era of intensifying competition between city regions internationally, Cork City Harbour is the project to help unite Cork Region assets and respond to these challenges and opportunities in Europe and Globally. 1.1.3 THE FUNDAMENTAL MESSAGE There is an amazing opportunity within the control of the State to deliver. There are large areas of prime State owned or controlled land assets that are vacant, underused, and derelict in the core of the State’s second city. Outside of Dublin, Cork City Harbour is the largest city area where sustainable development, economic growth, jobs and wealth can be achieved in the short, medium and long term.

To get this project moving, Government has to be the catalyst to drive the convergent actions and partnerships required to unlock the State’s land assets, resources and capacity to attract private sector resources.


COLLIERS INTERNATIONAL 8 1.2 EARLY ACTIONS REQUIRED 1.2.1 “THE SIX PACK” FOR 2013 Action Rationale Who Outcome When 1 Present this Economic Proposition Report to Government Secure cabinet support to further program CCC & DECLG Cabinet decision to support further assessment and development of the strategy & recommendations Q1 13 2 Manifesto or charter written Set down aims of partnership Government, CCC, PoC, Irish Rail/CIE, other semi states & major landowners Time related series of actions to be achieved.

Present to Government Q1 13 3 Development Structure What is right for Cork? CCC lead with Government Partnership: CCC, CIE, PoC, Nama, semi states & major landowners Options appraisal and agreed vehicle Q1 13 to Q3 13 4 Broker public sector businesses Unlock state land assets, resources & pan Government capacity CCC lead with Government Partnership: CCC, CIE, PoC, Nama, semi states and major landowners Partnership working Land primed for development Q1 13 5 Agree practical initiatives for 2013 Start to change perceptions CCC, PoC, CIE other semi states, landowners and occupiers Better perception, activity and animation Q1 13 6 Planning review Statutory requirement CCC Ensure continued flexible approach and consideration of short term uses Q3 & Q4 13 1.3 DESCRIBING CORK CITY HARBOUR The following is a product summary for Cork City Harbour.

1.3.1 THE PROJECT For the next twenty years Cork City Harbour will be the focus of master planned mixed use incremental development. It will be the expansion zone to drive economic growth, businesses, jobs and wealth for the City and Cork region. 1.3.2 WHAT DOES IT COMPRISE?

A city district of four, physically themed product areas that help shape the experience, offer and reputation of Cork City Harbour.  City Harbour Interchange. Mid to high density development led by transport accessibility  East Central. Mid to high density mixed use development led by transport accessibility


COLLIERS INTERNATIONAL 9  Mid Urban. Mid density, larger floor-plate uses and big users of space, i.e. property that might normally be attracted to suburban or out of town locations  Marina Lifestyle. Low density development around a strong leisure experience Figure 1: Cork City Harbour – view east to west towards the city centre Source: Brady Shipman Martin, Cork City Council and Colliers International 1.3.3 WHERE WILL DEMAND COME FROM? Continued growth in the Cork and Irish population; expanding domestic and international businesses, new domestic and incoming international businesses and leisure visitors to Cork.

1.3.4 WHY IS IT DIFFERENT? It re-orientates towards the City Centre and mobilises a partnership approach to delivery that is about unlocking state land assets and capacity. Development works off existing City Centre infrastructure and services. It has prime State owned or controlled assets that are key to unlocking the potential and the return to the Irish economy and State. Outside of Dublin, Cork City Harbour’s strategic location in the country’s second city makes it one of the most attractive pieces of real estate to draw in investment and jobs.


COLLIERS INTERNATIONAL 10 1.3.5 HOW IS IT BRANDED AND WHAT MIGHT IT BE CALLED? Cork City Harbour is a place open for business, people and ideas.

Best practice in urban development, improvement and management plus an urban lifestyle reflective of Cork’s cosmopolitan live, work and play character. There will be four themed physical product areas, City Harbour Interchange, East Central, Mid Urban and Marina Lifestyle. Initially it will not target on any one specific sector. Cork City Harbour, the name unites the assets of the City and Harbour Region. It will help to elevate the Cork City Region internationally. 1.3.6 HOW MIGHT IT BE DELIVERED?

Government mobilising creative partnerships that unlocks public sector land assets and private sector investment that supports a delivery vehicle to align interests and pool resources. Alignment and connections to the adjacent City Centre plus a range of other practical initiatives are early actions. 1.3.7 WHAT MIGHT BE ITS VALUE? Redeveloped city waterfronts are places that have helped cities re-evaluate their offer and experience. In particular Cork City Harbour will:  Drive public sector partnership working, a model for others to use in Ireland.  Ensure State and public company involvement early to grow the value of public sector assets and private sector confidence and investment.

Continue to modernise Cork City Centre and deliver the appropriate property solution the market demands.

Elevate Cork internationally through a clearer place brand strategy.  Be the location where sustainable economic growth, jobs and wealth can best be located.

COLLIERS INTERNATIONAL 11 2 THE BACKSTORY 2.1 A CORK STRATEGY FOR ECONOMIC RECOVERY The multi-disciplinary team was tasked with research, analysis and strategy advice covering four topics: 1 Global Business and Economic Assessment  the demand and supply context for economic growth and job creation 2 (Place) Branding and Marketing  how to position, market and sell Cork Docklands 3 Funding and Finance  With capital shortage and risk aversion how to mobilise scarce resources 4 Phased Implementation Strategy  to deliver development to meet the needs of people, business and Ireland A significant range and depth of work along with advocacy messages is condensed in this report that shows how Cork City Harbour can support the national economic recovery plan, contribute to the Action plan for Jobs and strengthen the Cork Region.

This report sets out a fresh product and market led approach for the area we are now presenting as Cork City Harbour. The aim of this work is to set out a credible, understandable, sellable and deliverable strategy that injects fresh momentum to spark development that can contribute to economic growth, job creation and wealth for Ireland.

2.2 THE PROJECT’S CONTEXT Cork City Harbour is a National Spatial Strategy and Cork Area Strategic Plan project. There are master plans and Local Area Plans and achievements have been made over the last eleven years since the 2001 Cork Docklands strategy was produced. In the current harsh economic and property climate, to reboot the project ready for emerging opportunities is sensible. However post credit crunch and in the current recession risk aversion is high and capital is scarce. Successful projects need rigour, evidence, credibility, partnerships, professionalism, governance and a good dash of is féidir linn (“yes we can”).

Cork is Ireland’s second city and the economic, social and cultural core of the southern region on the island of Ireland. It needs fresh momentum to meet ever more intense competition between City Regions. This means it is important to use the downtime in the Irish economy and this position in the market cycle, to position Cork for future success.

WITH Brady Shipman Martin DKM Economics Mott MacDonald Competition between cities is intensifying. Cork needs to strengthen its offer as a great place to live, visit and invest COLLIERS INTERNATIONAL 530+ OFFICES IN 62 COUNTRIES ON 6 CONTINENTS  US$1.8 billion in revenue  12,300 employees  1.25 billion square feet under management  76,000 lease and sale transactions  US$68.2 in transaction value

COLLIERS INTERNATIONAL 12 2.2.1 THE RATIONALE FOR CORK CITY HARBOUR In the following sections we explore and advise on the rationale for progressing Cork City Harbour and provide recommendations for delivery:  The market context for economic growth that supports the need for the refreshed Cork City Harbour project  In light of the market context what this means for a refreshed vision  The development strategy options to start implementation  How stakeholders should market and sell the project This study should help discussions with potential partners in the public or private sectors, whether in Cork, Dublin, London, New York, San Francisco, Brussels, Frankfurt, Dubai, Mumbai or Shanghai.

Figure 2: Cork City Harbour view eastwards towards the harbour Source: Cork City Council, Brady Shipman Martin

COLLIERS INTERNATIONAL 13 3 ECONOMIC RECOVERY 3.1 CITIES DRIVE ECONOMIC GROWTH Capital cities (including Dublin) and the traditional global cities will grow in influence and are being joined by new waves of global cities such as Rio de Janeiro, Moscow, Dubai, Shanghai, Mexico City and Johannesburg. Smaller cities around the world will be looking to attract and retain a larger share of investment, visitors and residents. In this ever more competitive environment Cork must ensure it can compete with the best in class.

The Cork City Harbour project is crucial for the future positioning of Cork and the Southern Region and as a contributor to the national economic recovery plan.

In Europe a report by ESPON (European Observation Network for Territorial Development and Cohesion) in June 2012 provides further advocacy for national Governments to support their second tier cities, such as Cork. The main recommendation is that investment needs to be made in national second tier cities. It argues that although individual countries face different circumstances: European, national, regional and city regional leaders should exploit the policy levers, tools and resources they have to encourage more higher performing second tier cities if they want higher performing national and European economies.

They cumulatively demonstrate that policy makers should take these issues more seriously in future and systematically examine how their decisions affect second tier cities. 1 This is an approach adopted in many more urban countries, especially in cities which have a major industrial heritage where significant repositioning and fresh economic development policies have been required over the last twenty five years. In many cities across Britain, Continental Europe and North America major successes and lessons have been accumulated in the revitalisation of their cities. For example: Bristol, Birmingham, Sheffield, Manchester, Cardiff, Glasgow, Lille, Gothenburg, Barcelona, Hamburg, Pittsburgh and Baltimore.

These cities have gone through a process of re-evaluation of their structures and offer to the market so as to be seen as a great place to live, visit and invest. 1 Second Tier Cities in Territorial Development in Europe: Performance, Policies and Prospects, ESPON, June 2012 We need to stop seeing our cities as the problem and start seeing them as the solution. Because strong cities are the building blocks of strong regions, and strong regions are essential for a strong America. President Barack Obama, 2008

COLLIERS INTERNATIONAL 14 Figure 3: Revitalised City Centres and City Regions Sheffield Pittsburgh Lille Around the world a multitude of vehicles, organisations, and structures have been tested. These locally based vehicles having improvement, development, marketing and management objectives, helping to broker relationships, attract more public and private sector funding and tell a strong investment story about their city. In nearly all cases cities have been given support by national Governments to help them take more control of their destiny. There have been many lessons, so the strategies and approaches for Cork are out there.

Cities play a vital role in creating growth and jobs. They are economic centres and motors of growth both for the wider region and for the country as a whole. In fact, I would go so far as to say a region can only be successful if its cities are successful.” 2 3.1.1 POSITIONING IRELAND AND CORK FOR THE FUTURE Economies and property markets move in cycles; the current downturn is especially harsh but an upturn will happen. However what the future Irish, Eurozone and European economy will look like is uncertain. Meanwhile the rest of the world is still doing business and making plans. Global political and economic change is intensifying competition among European and Global city regions for talented people, visitors and investment.

However the good news is that there are established, new and planned assets that will help attract global business to Ireland and encourage domestic businesses large and small. Since the late 1990s, Ireland has had a strategy to try to enhance the scientific, technological and innovative capacity of the enterprise sector. This has involved the funding of research and innovation capacity, the higher education institutions and other public research organisations. So at the heart of Ireland’s enterprise strategy is recognition that research and innovation is central to Ireland’s future prospects for enterprise and economic growth.

As a result: “Ireland has developed a solid base of research capability which is considered to be central to the long-term enterprise and economic growth and the development of sectoral opportunities”. 2 Danuta Hubner, former European Commissioner responsible for regional policy. Eurozone austerity, deeper federalisation, fiscal harmonisation, corporate fiscal responsibility and national politics there are a multitude of issues in play meaning an increasingly uncertain future

COLLIERS INTERNATIONAL 15 While in recent years, the focus of enterprise policy has largely been on growing the “modern” sectors of the economy, it has become clear that more “traditional” sectors, such as agri-food and tourism, can also offer real prospects for growth and expansion. 3.1.2 CORK HAS ASSETS IN PLACE AND IS DEVELOPING MORE Ireland and Cork has strengths and comparative advantages in ICT, Creativity, Tourism, Life Sciences, Agri-businesses plus Energy/clean tech. These are all good sectors to be in. They are further supported by poles of academic and R&D excellence in the Cork Region such as:  University College Cork, Crawford Art College and Cork Institute of Technology  The Tyndall National Institute  The Rubicon and Nimbus Centre  IMERC – Irish Maritime Energy Research Cluster  Teagasc - Food Research Centre  National Software Campus.

Plus there is the planned Cork Science and Innovation Park which should be another complementary project to Cork City Harbour. Furthermore there are a number of partnership organisations that aim to ensure joined up thinking across business sectors to drive convergent business actions, for example:  Cork Chamber  IT@Cork  Energy Cork  Cork Innovates  Cork Electronics Industry Association 3.2 CONNECTED CORK 3.2.1 TRANSPORTATION AND CONNECTIVITY Cork has strong domestic and international connectivity. The domestic motorway network has dramatically shrunk distances and will increasingly influence consumer and business decision making.

The Greater Dublin area and around 2 million people are now about 2.5 hours away. Cork has an hourly intercity rail service to Dublin, other parts of the country are also served and there is a good regional rail and bus service. The latter is a significant opportunity for bringing the regional workforce into Cork City Harbour to work. This is an asset that corporate occupiers will find attractive and should continue to influence local and regional planning.

Cork Airport, 8km south of the City Centre, has regular flights to the European hub airports of London Heathrow/Gatwick, Amsterdam and Paris. In total around The Tyndall National Institute one of the poles of R&D excellence that can contribute to long term economic growth, businesses and jobs

COLLIERS INTERNATIONAL 16 fifty European destinations are served. During consultation work, mention was often made of ensuring the various London connections (especially Heathrow) were maintained and strengthened. There are no direct intercontinental flights from Cork; North America is served from Shannon and Dublin.

There is however an efficient and convenient link to North America by the many services provided through London’s Heathrow airport. The services of Emirates and Etihad Airlines from Dublin have in recent years opened up the Middle East and Asia Pacific region. During consultation there was mention of the disappointment that the Dublin to Cork flight no longer operates. This was cited as being attractive to US businesses in the Cork Region. Indeed with flights now coming into Dublin from the Middle East/Asia Pacific, in time the rationale for the reintroduction of Dublin to Cork flight should grow.

The Port of Cork is a major asset for the region. It plans to eventually relocate the vast majority of their activities to the Lower Harbour from the City. This will help the Port of Cork businesses and their positioning more favourably for emerging opportunities. Relocation will allow them to serve significantly larger ships than is currently possible at either Tivoli or City Harbour Quays. 3.2.2 HIGH QUALITY BANDWITH A very important issue that impacts Cork and the rest of Ireland is that high quality broadband connectivity is three times more expensive than in Greater Dublin. The majority of the businesses and jobs that Ireland will be attracting in the coming years will need secure and high quality bandwidth.

Access to high quality and price competitive bandwidth for regional Ireland is crucial. Tier 1 fibre optic cables will help in marketing, changing perceptions and attracting businesses to a location. There needs to be a levelling out of this large cost differential as part of the national economic recovery strategy.

The Market Context for Cork City Harbour We review two vital issues that are central to the rationale of Cork City Harbour to contribute to the national economic recovery. These are Living in Cork and Cork Business. 3.3 LIVING IN CORK Cork is a strong City Region with a sizeable and growing population that is the second largest in the Republic of Ireland.  Just over 400,000 people live in what is seen as the City Region. This is called the Cork Area Strategic Plan “CASP” area. Within CASP is Cork City itself and an expanded urban area which is defined as Metropolitan Cork, having a population of nearly 300,000 people.

The tightly defined Cork City area has a Cork Street, London W1, the heart of Mayfair, home of much global wealth. Cork should strengthen London connections and networks. London is growing fast, especially East London. Easier wins are likely to be achieved here with London’s technology, capital and creative sectors.

COLLIERS INTERNATIONAL 17 population of nearly 120,000 people. The completion of new roads extends the Cork catchment to around 500,000 people within a 60 minute drive. Figure 4: Metropolitan Cork Source: Cork City Council Figure 5: Cork has a large and growing population Source: CSO, 2012 The “sizing” of Cork is an important message to international business. Show a large labour and customer market place. 100,000 200,000 300,000 400,000 500,000 600,000 City Metro Cork County CASP - City Region City & County Population Growth in the Cork City Region 2006 2011 Despite the recession and emigration at a 30 year high, the Cork (CASP area) population grew by 8% between 2006 and 2011 to nearly 410,000 people.

The City Metropolitan Region is now close to 300,000 people. Cork has a high quality environment, strong culture and sporting tradition, plus with a large existing base of FDI businesses. It offers an attractive quality of life for existing residents and new comers to the City Region.

COLLIERS INTERNATIONAL 18 3.3.1 POPULATION GROWTH Ireland’s population has grown by one of the highest rates in Europe; the Cork Region population continues to grow, this is good news for the longer term. The longer term population growth forecast produced prior to the economic crisis suggested the south west region might grow by 157,000 (25%) from 619,000 (2006) to 776,000 (2026). It is reasonable to assume that this growth will moderate; however Cork as the dominant city in the region should capture a high proportion of this future growth.

3.3.2 SOCIO-DEMOGRAPHIC CHANGE An important element of this population is the pool of talented workers, domestic and international, that over the coming years will increasingly dominate the workforce.

Generation Y”, the age group born after 1980, have grown up with technology, have different work styles from previous generations, strong expectations from their employer, expecting to move jobs many times in their working life and preferring an urban location to live, work and play. Commentators around the world are saying how they are different from Generation X and the Baby Boomer generation. Colliers International’s research and its day to day work with corporate business in Ireland and around the world, substantiates this trend. This will accelerate further with Generation Z when they start to enter the labour market within the next decade.

3 In Europe, Generation’s Y and Z will be increasingly mobile across borders, so ensuring Cork markets and presents itself as an open and inclusive city, offering an attractive lifestyle, that it is an “easy to use” city for new people whether from Ireland or overseas will be increasingly important. This is one of the drivers of the increase in place branding and marketing strategies around the world. 3.4 CORK BUSINESS 3.4.1 A HISTORY OF GLOBAL BUSINESS From reclaimed marshland and islets, Cork City for centuries has been a hub of international trade, commerce, manufacturing, transport, energy, culture, recreation and sport.

When Henry Ford visited Cork, his ancestral homeland, back in 1912, he chose the area now known as “Cork Docklands” for the location of his first overseas factory.


COLLIERS INTERNATIONAL 19 Figure 6: Cork home to cutting edge global business for a long time Source: Ford Ireland and Bob Montgomery Ford’s first purpose built overseas factory on the south bank of the River Lee. The site of the Factory is now Marina Commercial Park and employs around 1,000 people. One hundred years later, Cork is still welcoming life changing global businesses. The likes of Apple, GSK, Pfizer, Jansen, Johnson & Johnson, Starwood, EMC2, Dell/Quest, McAfee and Amazon are just a few.

All have had life changing impacts for people in Ireland and around the world. Cork City Harbour and an on-going refreshed City Centre offer and experience of quality and high competence will help further make the case for Cork as a global business location. Along with an effective place brand and marketing strategy that elevates Cork, a seamless concierge service for inward investors needs to be strengthened. Why? Political and economic pressure is increasing in the traditional source markets of foreign direct investment (FDI) from the USA and the Eurozone – Germany and France - as to Ireland attracting significant businesses based on the low corporate tax rate.

This is a live issue and Ireland will need to continuingly press home the case for its low corporate tax rate, the other advantages that business can benefit from by locating in Ireland, plus the location offer and services Cork can provide.

Emerging Sources of FDI Nevertheless with the rise and rise of China, India, Russia, Brazil, plus Indonesia, parts of Africa and Latin America, businesses from familiar and emerging nations USA UK Germany France Switzerland Denmark Netherlands Japan Sweden Bermuda FDI SOURCE COUNTRIES 2011

COLLIERS INTERNATIONAL 20 will be looking for international opportunities. Consequently Ireland and Cork remain attractive and well placed to maintain and grow Ireland’s share of international investment; whether from traditional or emerging source nations of FDI.

Figure 7: Global business locating in Cork Source: Cork City Council 3.4.2 CORK’S EVOLVING BUSINESS BASE The story for Cork is about new business functions and activities. This is being driven by domestic and global economic, demographic, social and technological change. Businesses in Cork are moving further along the value chain. This means less manufacturing and assembly and more “international traded services” - manuservices, knowledge process outsourcing, business process outsourcing and the emerging personal manufacturing sector.

Increasingly too, there is evidence of greater convergence and interconnections between different sectors and businesses such as health and technology, agribusiness and health, creative industries and technology. This current and emerging business demand is suited to office space in a City Centre or City Centre fringe location. Increasingly this is where a company’s most important assets, its people, want to work. Apple is exhibiting this trend dramatically with around 500 employees now in the Lavitts Quay area of the City Centre.

COLLIERS INTERNATIONAL 21 3.4.3 BUSINESSES FOR CORK CITY HARBOUR Cork has high quality educational and R&D poles that should all help to attract businesses and jobs to the Cork Region.

They should contribute to demand for business space in Cork City Harbour. The solution that Cork City Harbour offers is that it is the location for the larger space requirements flowing from start-ups and incubator companies plus FDI and relocating corporate business within Ireland. It is the optimum location to accommodate large scale office employment - sustainably. It should also be the location for a variety of businesses at different stages of evolution. The sectors or business activities should not be narrowed down to any one sector at this time, as failure to attract would negatively impact the project.

A business truism is that you get 80% of your business form 20% of your clients. For Cork City Harbour new or expanded business functions from the existing businesses in the City Region should be an initial target. Business Functions and Activities The business functions from existing (and new) businesses that might well have a requirement that can be met by Cork City Harbour include:  Knowledge process outsourcing, the higher skilled end of business process outsourcing should leverage off Cork’s high quality R&D and education establishments. This will also help to target the education services sector, to provide “e” learning products and services internationally.

Plus general corporate location consolidation that is likely in the coming years for example in the International Financial Services Sector.

Manu-services is an existing area where Cork is strong, for example a large element of Apple’s base in Cork is focused on this. With Cork’s existing manufacturing and assembly businesses, providing the location and property option in an urban environment will help attract and retain these businesses and their higher value functions. Both functions need to integrate these cross cutting themes of excellence in customer service, IT and language skills. Business Sectors The sectors where Cork City Harbour can offer benefits in part due to specialist organisations or R&D excellence that helps to attract businesses will include:  Energy and Cleantech, from Bord Gáis Ēireann (BGE) and the changes underway in the nationalised energy utilities to the recent Barryroe oil field discovery which is likely to provide a small but important oil sector.

The IMERC however should prove a powerful attractor over time to help ensure the Cork Region capitalises on its maritime energy wealth.

DEFINITIONS Cleantech: the whole range of products, services and processes that seek to maximise efficiency, minimise the use of natural resources and minimise pollution. Corporate consolidation refers in this report to companies that seek to rationalise their locations and property holdings. Knowledge process outsourcing: the step beyond business process outsourcing, where companies delegate core value-adding processes to specialist contractors. Manu-services: the term was coined in 2011 to reflect the way in which manufacturers increasingly combine goods and services packages – from a simple consumer repair and maintenance warranty to the most complex procurement deals.

COLLIERS INTERNATIONAL 22  ICT, likely to be across the whole area with opportunities in digital games, software and hardware. The Tyndall National Institute, National Software Campus, Rubicon Centre and Nimbus Centre are all existing hubs of learning and innovation to generate new businesses and create jobs.  Health and life sciences from the pharmaceutical companies in the region, alongside existing and planned R&D facilities of the Tyndall, Rubicon and the potential “Health Hub”.  Agri-businesses, Cork’s long history as a major supplier of agricultural products and the modern Teagasc food research laboratory in Fermoy.

The following three sectors can also help in the marketing and branding of the City Harbour destination to corporate business and also deliver jobs. Developing an attractive lifestyle offer will appeal to people as a place to live and visit and appeal to businesses as the environment will appeal to potential employees.  Creative sectors: the Crawford Art College has expressed a strong interest in consolidating in Docklands. Arts groups from UCC and Triskel are also interested in the Cork City Harbour project. Alongside the existing and energetic National Sculpture Factory, this could add real critical mass for a “Creative Quarter”.

This provides a further pole of R&D excellence alongside the like of The Tyndall National Institute and IMERC.

New format retail and leisure: retail continues to change, new formats are evolving and Cork needs flexibility to accommodate them.  Tourism: redeveloped docklands have gone hand in hand with product development in the visitor economy whether business or leisure tourists. The Marquee season has become well established, and plans for redevelopment of Páirc Ui Chaoimh are likely to extend the number of event days at the stadium. A refurbished Marina Park with a clear range of uses, activities and events should be a major early addition. Marina Park and the rest of Cork City Harbour should seek to integrate Cork Harbour into the City.

Cork City Harbour is also the ideal location the City Council bid to develop a World Centre for Irish Heritage. The location is authentic and central to the story of the Irish Diaspora.  Cork’s heritage of the last 100 years in manufacture and assembly plus strengths in ICT and creativity means a sector that should be investigated as a priority is personal manufacture or 3D printing. IS THERE A “FORD 2012 EMERGING”? Government has been undertaking numerous highly publicised international meetings, with political and business leaders in the US and China. Is there a potential large scale user emerging from these meetings that is looking for an Irish and/or European base?

COLLIERS INTERNATIONAL 23 International and Domestic Businesses Domestically the recession is seeing new indigenous businesses being formed. Of course some will fail but others will succeed and grow in the coming years. The consultant team strongly believe that one way to support and nurture these entrepreneurs is to encourage a critical mass of them – Cork City Harbour could provide the home. The benefit being that in close physical proximity they can all learn and benefit from each other through an “open innovation” approach to compliment online media. Part of the success of Europe’s largest digital hub of “Tech City” in the Old Street and Shoreditch area of London is the proximity of startup entrepreneurial businesses many of which started in secondary or tertiary office or industrial property.

There is the basic, low cost property in Cork City Harbour to facilitate this.

Figure 8: Tech City in London, driving open innovation Source: Google 3.4.4 KEY MESSAGE International investment will continue to be important however there is not the quality product to offer them at present, if for example there was a requirement for office space to accommodate several hundred workers. The pipeline of office space in the City Centre is lacking and so will not attract international investment until they have the confidence in the short, medium and longer term requirements can be met. These issues are explored later in this report.

Fumbally Exchange in Dublin, bringing start up and accelerator businesses together

COLLIERS INTERNATIONAL 24 3.4.5 ATTRACT TALENT AND CASCADE LEARNING Government and local stakeholders need to continue to drive and support more convergent actions to support the Action Plan for Jobs objectives. To support this, Government, City Council, business, the IDA Ireland and Enterprise Ireland and education institutions need to continue efforts to educate and attract people with the skills required for target business sectors and functions, such as ICT, Languages and Customer Service. This might be termed a “Collaborative ahead of the game business strategy” that will help strengthen Cork’s position as an attractive city location with lots of talent.

Initiatives such as IT@Cork and EnergyCork are reportedly working well. Consideration of instigating similar groups to support the evolution of target business sectors would include creating the following focused collaboration groups:  International Education Services @Cork  Customer Service @Cork  Personal Manufacture @Cork Some sectors would be expected to have larger employment potential than others and in different time frames. Multiplier effects could be significant in sectors where there are actually a relatively low number of jobs. For example in the tourism sector, indirect spin offs could be exceptionally high from an iconic tourism product such as the World Centre for Irish Heritage.

Tourism is also a sector where direct and indirect jobs can be generated relatively quickly. The Gathering initiative in 2013 and how Cork positions for it needs to be the focus of attention in the coming months and to derive a lasting legacy.

Figure 9 highlights the core business sectors that are expected to occupy business space in Cork City Harbour. Events and activities are strong in Cork, how can they continue to help drive visitors and what other events and activities might Cork consider?

COLLIERS INTERNATIONAL 25 Figure 9: Summary of potential City Harbour target sectors Sector City Harbour Employment potential Timeline for employment generation Comments Manufacturing Low Short/medium 3D Printing, personalised manufacturing, FabLab. Set up a 3D Printing@Cork group Health/Life-sciences Medium Medium Health Innovation hub, pharmaceuticals, medical devices and connected health Energy and cleantech Medium Medium Leverage off existing developments and institutions Agri-Food Medium Medium Teagasc Food Research, heritage of the region ICT Hardware and Software/Cloud and Gaming Medium Short/medium Mainly software; also 3D Printing, personalised manufacturing, FabLab.

International Financial Services Medium/High Short/medium Middle and back-office functions; consolidated banking functions. Business Process Outsourcing/Shared Services High Short/medium Dominant FDI sector for Cork in last decade. International Educational Services Medium Medium Very strong educational base in Cork; overseas students; global courses Retail/Wholesale Medium Short/medium Will require changes to LAP to enable significant employment in Docklands. Arts, Culture and Creative Enterprise Low/Medium Short/medium Potential for quick wins with Crawford College, National Sculpture Factory, etc.

Tourism Medium Short/medium Majority docklands projects have a strong tourism offer. Potential for an iconic/symbolic project of Irish authenticity: World Centre for Irish Heritage. Employment Potential: based on experience, a subjective estimate of what each sector is likely to mean in terms of job potential in Cork City Harbour. For example more modern manufacture and assembly is unlikely to offer large employment potential, however office based business process outsourcing would create large numbers of jobs. Timeline: Short is say 1 to 3 years, Medium 3 to 6 years, Long 6 years plus. Research & Development is a crosscutting theme in the above sectors.

3.4.6 JOB POTENTIAL Our estimate of 7,000 jobs 4 in the Cork Docklands by 2021 is based on an analysis of: 1 The supply side – labour force growth over the coming decade in Cork City and County, and 4 DKM Economics, September 2012

COLLIERS INTERNATIONAL 26 2 The demand side – the targets for additional employment under the Action Plan for Jobs, assuming the Cork region can maintain its current proportion of national employment. It is further predicated on:  A gradual return to normal unemployment rates (6% national and regional unemployment)  Successful kick starting of development in Cork City Harbour in the coming years.

Our analysis of the future workforce in Cork City and County indicates a net increase in employment between 2012 and 2021 of 32,000. If 50% of the employment growth for city residents and 20% of the employment growth for county residents could be directed into Cork City Harbour, then this would equate to 8,000 jobs.

Considering the Action Plan for Jobs, this foresees an additional 200,000 jobs being created in Ireland by 2020. Cork City and County is currently home to slightly over 11% of the employment in the State, so if a similar proportion of the additional jobs under the Action Plan were located in Cork that would equate to approximately 22,000 jobs by 2021. If 25% of these could be directed to Cork City Harbour that would mean that approximately 6,000 jobs would locate there (rounded figures). The mid-point between the supply side estimate (based on the growing labour force) and the supply side (based on the Action Plan for Jobs) is 7,000 jobs by 2021 in a regenerated Docklands.

This can also be seen in the context of the forecast in the City Development Plan 2009-2015 of an additional 15,000 jobs in the city by 2020.

3.5 REBALANCING ECONOMIC GROWTH LOCATIONS There is a third major issue intrinsically related to living in Cork and Cork Business. This relates to refocusing policy and actions to support the City as the engine of the Southern Region. Too much economic activity and homes have been allowed to disperse across the City Region. The previous twenty years were dominated by out of town development the next twenty should see a complimentary rebalance towards the City. Business, social, demographic, technological and environmental trends in Ireland and in much of the developed world are driving a return to downtown business locations.

In Cork with more people working in the City, this should generate significant benefits, such as spending in shops, cafes, restaurants, pubs, museums and attractions. Plus efficiencies in the delivery and costs of infrastructure, public transport and services. A rebalance towards the City Centre can help sustainable development and economic activity.

Google in Barrow Street, Dublin is a good illustration of the type of environment being sought

COLLIERS INTERNATIONAL 27 Figure 10: Cork City Centre and its fringe locations have great ingredients Source: Google Cork City will align with current and emerging identified trends:  Higher value business functions and activities being captured by Cork and Ireland that requires a range of good value office options.  Global and domestic businesses want a large and accessible labour market with private and public transport options  Attraction and retention of talent, the appeal of City Centre locations by younger (Generation Y) international workers.

Supporting critical mass through convergent activities in business functions, knowledge and innovation sharing, which is resulting in people preferring a location where they can more readily meet, share ideas and knowledge  Cost and environmental factors will also mean renewed focus on downtown locations for indigenous and global business alike.  Smart, Creative, Connected and Convergent actions by City authorities related to sustainability targets and improved efficiency in public transport and services. These are all confirmed by Colliers International around the world and reflect work with occupiers, investors and developers as well as on-going research work.

3.5.1 ACCOMMODATING FUTURE ECONOMIC GROWTH The identified business activities, functions and sectors will require a good value flexible office property solution. Some will benefit from out of town property solutions but increasingly in Ireland and around the world, urban and city centre locations and property solutions are being sought. Cork needs to build on its advantage of compactness and deliver more critical mass in the city. In an era where the watchwords are those such as open innovation, collaboration, shared

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