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Dublin among the busiest markets in 2014 but few investors looking at it now


The office sector dominated the market in 2014

The office sector dominated the market in 2014

The office sector dominated the market in 2014

Dublin was the sixth most active market for commercial propery deals in Europe, with trade volume increasing 131pc year on year.

New data from CBRE shows that €3.8bn worth of commercial real estate changed hands in the capital in 2014. That compared to an estimated €1bn in total for the rest of the country.

The broker's Capital Markets Overview for 2014 claims that "Dublin saw a record turnover of €3.8bn in 2014, recording the biggest percentage increase on 2013 of the top 10 cities, with a substantial proportion of the investment coming from the Americas."

Overall, Dublin ranks behind only Munich, Frankfurt, Stockholm, London and Paris for deal activity in the past 12 months.

Madrid exhibited a similar trend, with the exception that it attracted proportionally more Asian and Other European capital than Dublin. Stockholm did exceptionally well in 2014, returning to third place in the table. However, unlike Dublin and Madrid, the Stockholm market is dominated by local investors, who accounted for around 90pc of all transactions.

The report confirms how succesful the turnaround in the Irish market has been, especially with the huge portfolio sales being carried out by the likes of Nama and Ulster Bank.

The pace of sales increased in the last three months of 2014, with 11 deals worth more than €100m, compared with three each in the second ansd third quarters fo the year. No deal of that size was closed in between January and March 2014.

"Ireland was one of four countries to register record levels of investment activity in 2014. The €1.6bn of investment in Q4 included an uptick in the industrial sector, which has lagged behind other parts of the market, but registered nearly €200m of transactions in Q4," the report added.

Meanwhile, despite the rapid Irish growth, the country does not rank among the most desirable destinations for alternative investors in 2015.

CBRE's Investor Intentions survey for 2015 found the overwhelming majority of investors still expect to put money into the traditional markets of the UK, Germany and France, with the huge deleveraging taking place in Spain also pulling in investors as they continue to hunt yield.

CBRE Ireland executive director and head of capital markets Johnny Horgan commented: "Investors are constantly having to evolve their investment strategies, in their pursuit of yield and returns, as demand for European commercial real estate shows no sign of abating.

"This diversification is leading investors into new markets and sector. However, there is still significant demand for core locations and assets, particularly from the growing influx of capital from outside the region.

"Interestingly, a large proportion of respondents stated their intention to increase their overall trading activity, across a broader spectrum of risk, this year. This movement up the risk curve should benefit a far wider range of markets and sectors across the region."

Indo Business