Irish commercial property market readies €1b assets for sale

Up to €1 bn of commercial property assets are expected to be put on the Irish market in the autumn months, according to indications from leading brokers in the region. 

CBRE data shows that investment in the Irish market exceeded expectations in the first half of 2018 with volumes of more than €1.86 bn, buoyed to a large degree by eight transactions in excess of €100 mln, some of which were residential forward-funding transactions.

'Activity in all of the occupier markets (office, industrial, retail, hotels) remains strong,' commented Marie Hunt, executive director & head of research at CBRE Ireland. 'Following a very strong first half, there are several transactions due to complete over the coming months and more than €1 bn of new stock due to be released for sale.'

Although yield compression has remained elusive over recent quarters, income growth remains attractive with total returns from Irish commercial real estate running at 7% on an annualised basis to the mid-year point and returns of 4.6% achieved in the first half of 2018 alone, according to MSCI. This rate of return compares favourably with other European locations being targeted by investors at present.

Meanwhile, private rented sector/build to rent is becoming increasingly mainstream, having accounted for 25% of investment spend in the Irish market in the first half of 2018.

'There has been a remarkable increase in appetite for residential investment opportunities over recent months, which is evident from recent investment sales and development land sales alike,' Hunt added.

This week alone, Savills reported a number of new assets reaching the market. A site with planning permission for 419 apartments, a house and seven commercial units in Dublin 7 has been put up for sale with a guide price of €32 mln.

Meanwhile, in Dublin CBD, Savills has brought the Dublin Business School premises to market for €15 mln, representing a capital value of €532 per ft2. The asset is wholly let to the Accountancy and Business College Ireland.

In Limerick, Savills is marketing the CityEast Retail Park with a guide price of €28 mln and an average weighted unexpired lease term of 9.4 years. Tenants include B&Q, Harvey Norman, Halfords, Home Store + More, EZ Living, Home Savers and Maxi Zoo.


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