Friday 30 September 2016

Investment property deals expected to top €3.5bn this year - Savills

Published 05/07/2015 | 02:30

Block R Spencer Dock was one of the biggest single asset property deals this year so far
Block R Spencer Dock was one of the biggest single asset property deals this year so far

The commercial property market is likely to see some €3.5bn worth of property change hands this year,a new report has shown.

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While that is below the record of just under €5bn in 2014, it still will be an exceptionally strong year in the market.

According to Savills, close to €680m of tenanted property was transacted between April and June.

This brings the total investment spend for the first half of thisyear to over €1.7bn, only marginally down on last year's H1 figure of €1.79bn.

While the value of investment turnover has remained relatively consistent, transactional activity has increased dramatically with the number of deals tripling from 33 in the first half of 2014 to 102 in the first six months of 2015.

Commenting on the figures, Savills director of investments Fergus O'Farrell, said: "The first six months of 2015 has been positive, not only because of the overall level of activity, but also because of the breadth and depth of market demand.

"We now have a wider and more diverse buyer pool to sustain the market with significant levels of turnover and volume" he added.

In this context Savills noted that it was encouraging to see a range of new entrants coming into the Irish market - these include the likes of German funds Patrizia, Union Invest and Real IS, all of whom have recently made their first acquisitions in Ireland during 2015.

During the second quarter the Cornerstone Portfolio was the only investment deal that traded for over €100m, with the largest single asset sale being the Riverside 1 office investment which was sold for over €80m to IPUT.

Savills noted that unlike previous years, Irish Investors dominated the investment landscape accounting for almost 53pc of transactions, the main players being Irish Life, IPUT, Davy, Green REIT, along with a large number of Private Irish Investors.

The buyer mix in Q3 may see international investment becoming more prevalent in the market place, with larger sales currently on the market such as Block R, Spencer Dock and The National Portfolio likely to be of interest to foreign investors, coupled with the expected launches of a number of Nama asset portfolio sales, the firm said.

Investors continued to focus on office and retail investments accounting for approximately €280m and €259m respectively.

Despite ongoing worries about the state of the property market outside Dublin, Savills say more than half of transactions involved property farther afield than the capital, with large transactions taking place in Cork, One Albert Quay and Kerry, Manor West shopping Centre.

A number of private equity investors have questioned how strong the recovery is in markets outside Dublin with one investor telling a London conference the "jury was still out" but Savills's data, along with a report from CBRE earlier this week claim the recovery is real.

Sunday Indo Business

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