The level of investment activity in Ireland's commercial real estate sector for 2018 is set to hit €3.5bn.
hat's the upbeat forecast from real estate advisers, Knight Frank, as the year draws to a close.
While the final tally is dependent on the completion of numerous deals agreed in the fourth quarter, the overall value of transactions will be up markedly on €2.5bn in 2017.
This year's total outturn will, however, be some way off the record €4.5bn recorded in both 2016 and 2014.
The office market accounted for the largest share of deals done by sector according to Knight Frank. Centred primarily in Dublin, this activity was driven by a combination of strong occupier demand and competitive pricing relative to other European locations.
Knight Frank's analysis shows how Dublin, with prime office yields at 4.00pc, is operating at a significant discount compared to cities such as Amsterdam (3.50pc), Frankfurt (3.10pc) and Paris (3.00pc).
The emergence of institutional capital from Asia was a key feature of the 2018 market, Knight Frank's report finds.
Asian investors accounted for three of the top five office deals during the year. This included the largest office transaction - the €176m sale of One and Two Heuston South Quarter to Hong Kong-based CK Properties Ltd.
Knight Frank notes the sharp increase in investment in the Private Rented Sector (PRS) as the other big trend in 2018, with more than €1bn spent in this sector by a range of global institutional investors.
The report cites "favourable long-term demographics, rising rents and the delivery of new investable-grade stock to the market" as factors that encouraged buyers to the PRS sector.
The largest PRS deal in 2018 was the forward funding of 372 apartments at Marrsfield, Clongriffin for €140m by SW3 and Tristan Capital Partners.