Monday 18 February 2019

CBRE say prime BTR yields now at 3.85pc

The build-to-rent market is becoming increasingly popular. Stock Image: Bloomberg
The build-to-rent market is becoming increasingly popular. Stock Image: Bloomberg
Ronald Quinlan

Ronald Quinlan

CBRE has announced that yields for prime Build-to-Rent (BTR) property investments in the Dublin market have now hardened to a new level of 3.85pc as a result of strong investor appetite for this emerging asset class. The figure compares with 4.0pc for prime office properties and 5.1pc for prime industrial assets at present.

The Build-to-Rent sector has now become a mainstream investment sector of the Irish market in its own right, having accounted for 30pc of investment in Ireland during 2018, up from only 4pc in 2015.

Commenting on the numbers, Marie Hunt, executive director and head of research at CBRE said: "The volume of international capital looking to deploy in the Build-To-Rent residential sector in Dublin is at an all-time high, which in turn is putting pressure on prime yields, which have now hardened to a new low of 3.85pc.

"As further transactions complete over the coming months and set new transactional evidence, we expect prime yields in this sector to compress further. The growth of the Build-to-Rent sector in Ireland has been phenomenal with more than €1.167bn deployed in 2018 compared to just over €70m when multifamily investment first materialised in the Irish market in 2012. In fact, investment in this sector is only compromised by a shortage of investible stock such is volume of capital looking to deploy."

Ms Hunt added: "An increasing proportion of investors seeking to invest in the Build-to-Rent sector here are now willing to look beyond core city centre opportunities and are focussing attention on good suburban locations on key transport nodes where viability and affordability are considerably better".

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