Friday 22 September 2017

Dublin second most attractive investor spot in Europe

Aerial shot of Dublin Docklands including Convention Centre
Aerial shot of Dublin Docklands including Convention Centre
Hamburg
Munich

Peter Flanagan Commercial Property Editor

DUBLIN is now one of the two most attractive cities for investing in real estate in Europe, as markets back the economic recovery.

According to a report from PwC, Dublin trails only Munich in Germany as a destination for foreign investors looking to buy offices, hotels and the like.

Dublin's move up the rankings for investment is a dramatic one.

Last year's survey had Dublin at number 20 in terms of attractiveness to the international market for current investment, compared with number two today.

The capital is the best city for new investment, compared with 15th last year.

More than half of investors who took part in the survey said they had a favourable view of the Irish real estate market now.

The PwC report is the latest fillip to the commercial market, which posted its best year in five in 2013.

Close to €2bn worth of deals were done in Irish commercial real estate last year, with much of the business being done by big international players including the Los Angeles-based Kennedy Wilson, while other investors have included John Malone, the US media mogul who is also the largest private landowner in North America.

The 'Emerging Trends in Real Estate -- Europe 2014' report, drives home how just how attractive Ireland is today, as the perception that prices have bottomed out and are beginning to recover takes hold.

"Investors believe that 2014 will mark Dublin's comeback, driven by improving economic conditions, with unemployment at its lowest level since 2009, and forecasted GDP growth of 2pc this year," said PwC Ireland's Real Estate partner Tim O'Rahilly.

"However, opportunities for investment will be limited due to the size of the market. Office prices have increased significantly over the past 12 to 18 months in prime locations, and local investors are predicting a further rise of 10pc in 2014.

"Survey respondents highlighted there was significantly more equity available and that bank debt was becoming available again for the right assets and investors.

"The residential market is also recovering, with prices for well-located properties rising over 20pc last year. However, retail is still under pressure, with rents continuing to fall, albeit at a slower pace," the firm added.

While Dublin was the main winner overall, Ireland was not the only market that has experienced a downturn but is now bringing in overseas money.

The survey overall paints a picture of "recovering markets" such as Spain and other parts of Europe becoming more popular for capital destinations.

Dealers are looking beyond the likes of London and Paris, where prices are rocketing, and instead focusing on secondary cities such as Stuttgart where yields are much higher and returns on capital can be multiples of what is available in the prime markets.

Irish Independent

Also in Business