Sunday 25 February 2018

Commercial property deals top €600m in first quarter

Whitewater sale biggest so far this year as JLL’s
Hannah Dwyer reports ‘steady’ start to 2016
Whitewater sale biggest so far this year as JLL’s Hannah Dwyer reports ‘steady’ start to 2016
Hannah Dwyer
Peter Flanagan

Peter Flanagan

Property deals worth close to €600m were completed in the first three months of the year, new figures show.

However, unlike past years, the vast majority of sales are now for properties worth less than €10m.

It's a sign that investment funds which bought swathes of Irish assets since the crash are now furiously churning their portfolios.

Data from property agents JLL shows that 80pc of transactions between January and March were for between €1m and €10m. There were only two deals valued at more than €50m during the period.

Private equity firms and other funds have bought numerous large portfolios of property and related loans. In many cases, the funds bought those portfolios to get access to a small number of properties and have been happy to sell off the other parts to interested buyers. The "churning" process has become common across the Irish commercial property sector.

In another sign of portfolios being churned, there was a sharp increase in the level of deals involving property outside Dublin. Regional deals now account for 44pc of all transactions. Whitewater Shopping Centre in Kildare was the largest sale this quarter. German fund Deka Immobilien bought the centre for €180m.

The second largest was the Central Quay office building in Dublin 2, which Hibernia Reit bought for €51.3m.

JLL head of research Hannah Dwyer said the numbers showed it had been a "steady" start to 2016.

"A few large transactions that were on the market in [the fourth quarter of 2015] have closed in the last three months and have boosted total volumes.

"There was also a large concentration of activity in the €1m to €10m category.

"Demand has remained steady with a mix of international (DEKA, Credit Suisse, Kennedy Wilson and BNP Paribas) and domestic (Hibernia Reit and Davy) investors active in the quarter.

"With a number of large-scale assets such as Blanchardstown Centre (valued at €1bn) and Glas Collection (estimated at €170m) currently on the market, the second quarter is expected to see an increase in investment volumes," Ms O'Dwyer added.

"With a strong Q2 forecast, at this point in the year, we are predicting that volumes for the year-end could achieve similar levels to 2015, with approximately €3bn transacting."

Irish Independent

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