Wednesday 16 January 2019

Almost €1bn invested in commercial property

Marie Hunt
Marie Hunt

Ronald Quinlan Commercial Property Editor

some €930m was invested in commercial property in Ireland in the first three months of 2018, according to separate analyses published by CBRE and JLL yesterday.

In its assessment of the market, CBRE said Dublin continued to command the bulk of investors' attention, securing nearly three-quarters of the capital deployed in the year to date.

Interest in Cork is growing, however, with 11pc of this year's spend taking place in the city.

JLL, for its part, noted that the €930m invested up to the end of March represented a near 200pc increase on the volumes transacted in the equivalent quarter in 2017.

It acknowledged that much of this increase was accounted for by a number of high-value transactions, which had been agreed in the final months of 2017, now completing.

The largest transaction to have taken place in the first three months was the €175m sale of the Heuston South Quarter (HSQ) office scheme in Kilmainham, Dublin 8.

Commenting on the performance of the commercial real estate sector so far this year, CBRE executive director and head of research, Marie Hunt, said: "Following 2017, which saw more than €2.5bn of assets traded in the Irish market, the first quarter of 2018 has seen continued activity in the Irish investment market".

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Ms Hunt said there has been "50 individual transactions with a value of more than €1m, totalling almost €930m between them".

While remarking that the office sector accounted for more than half of investment spend up to the end of March, Ms Hunt (pictured below) noted that 14pc of the spend in Q1 had been accounted for by the emerging build-to-rent/multifamily sector.

JLL's CEO and head of investment, John Moran, meanwhile said that 2018 had seen a "very strong start".

With demand for investment expected to remain high, Mr Moran added that JLL is anticipating year-end volume levels to be similar to those seen in 2017, and to come in at over €2bn. "In particular, we are predicting strong demand for PRS (private rented sector) and alternative investments such as student housing, where strong occupier demand is reinforcing investor appetite," Mr Moran said.

"There is also still strong demand in the market for office investments. Opportunities in this sector, however, will be limited, which will lead to strong competition for prime assets.

"There remains limited scope for yield compression across all sectors.

"Accurate pricing of opportunities remains crucial to liquidity, with assets that are overpriced failing to sell," he added.

"This trend is particularly acute in the secondary sector."

Irish Independent

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