Investment to reach fresh record high of over €4.6bn

Sale: German fun Patrizia AG is paying €52.5m for Benson Building

Donal Buckley

A new record level of property investment is expected this year as the value of transactions looks set to exceed the previous record of €4.6bn achieved in 2014. These are among the latest findings from property consultants JLL. The record will be largely due to Green REIT's sale to Henderson Park, which will boost volumes by more than 50pc this year.

"That said, even without this sale, the market continues to perform strongly with any opportunities being met by a good level of investor interest," says Hannah Dwyer, head of research, JLL Dublin.

"Dublin as a location continues to be the focus of demand from investors, with solid depths of interest and bidding on prime transactions, particularly for PRS (residential portfolios) and offices," she adds.

Overseas investors continue to dominate volumes, accounting for 60pc or €1.1bn worth of deals in the year-to-date. Interest is broad and varied, with capital from the US, Germany, Korea, and Singapore. There are still new entrants to the market and a resumption of interest from parties who were previously active.

Active domestic investors include IRES REIT, Irish Life and IPUT. Overseas purchasers include Henderson Park, LRC Group and Deutsche Wealth Services.

As a modern open economy with transparent operating processes, Dublin's attractiveness has been underlined by Ireland's strong growth, which has put it at the top of the European table. Whilst pricing has strengthened, there are still opportunities to generate value, whether that be in specific sectors that still have potential for rental growth, through clever asset management, or in development and refurbishment.

Ms Dwyer expects PRS investment to continue to be the most active sector in the next six months focused on Dublin and wholly owned PRS opportunities, whether complete or at development stage as a forward fund or forward purchase.

At the end of June, agents Hooke and MacDonald estimated that 18 residential transactions were at the sale agreed stage in Dublin, six of which are new build developments, comprising 696 units, and 12 were existing stock comprising 518 units. The total sales value was €516m.

The most recent of these has seen German fund Patrizia AG agree a deal to pay €52.5m for a block of 72 apartments known as Benson Building, being developed by Targeted Investment Opportunities in Dublin's south docklands in a deal brokered by Savills and Owen Reilly.

Ms Dwyer estimates there is currently about €5bn of capital looking to get into PRS in Ireland.

"Volumes will be dictated by supply. Good quality opportunities that come onto the market will be met by strong demand and pricing," she adds.

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