Commercial property deals set to break €2.1bn
A strong pipeline of commercial property assets should see investment transactions in the sector in Ireland top €2.1bn this year, according to Knight Frank.
The property group said that there were €505.7m of investment transactions during the first quarter of 2019, which was nearly half the figure recorded in the first three months of 2018.
But Knight Frank said that the decline in investment volumes is expected to be temporary.
Dublin remained the primary destination for investment activity in the quarter, with a market share of 95pc or €482.2m of deals, according to Knight Frank.
Office sales accounted for €288.8m of investment transactions in the period.
The single largest office deal in the quarter was the sale of Charlemont Exchange by Marlet to South Korea's Vestas Management for €150m. The property is let by co-working group WeWork. Amazon is expected to be the main tenant at Charlemont Exchange.
That deal boosted the share of Asian buyers in the office market to 33pc, according to Knight Frank. It added that there has been keen interest among Asian investors for office assets in Dublin.
European investors accounted for 30pc of the office market, and Irish buyers 26pc.
French group BNP Paribas Real Estate Investment Management and Corum acquired The One Building on Dublin's Grand Canal Street for €49.5m, and South Point at Grand Canal Dock for €12.7m.
The single largest retail transaction in the period was Iput's sale of its 25pc stake in the Pavilions Shopping Centre in Swords, north Co Dublin, to Irish Life for €71m. That brought Irish Life's stake to 50pc. The remaining 50pc is owned by UK property group Hammerson.
Deutsche Bank bought 7-9 Henry Street for €44.3m. It was originally part of Arnotts, but was separated from the store and refurbished before being let to Next.
"While activity in the opening quarter was relatively subdued, the opportunity pipeline for the remainder of the year looks bright which should ensure another strong year of investment volumes," said Knight Frank director Adrian Trueick.
He added that offices including The Reflector, Hanover Quay and Bishops Square in Dublin are all expected to be offered for sale this year. He said that the private rented sector "continues to grow in importance as an asset class", with "significant opportunities of scale" expected to come to the market.