Sunday 25 August 2019

Dublin among top 10 cities for investment in multifamily housing

(Stock image)
(Stock image)
Ellie Donnelly

Ellie Donnelly

Dublin has entered the top 10 cities in Europe for cross border investment in multifamily housing.

The most common type of these residential portfolios are apartment blocks.

Between 2014 and 2018 €2bn was pumped into multifamily developments in Dublin by international investors, according to a report from global real estate advisor CBRE.

Changing regulation, demographics and structural fundamentals have all driven the growth of such housing.

Historically, investment in multifamily developments has been dominated by domestic financiers.

However, international investment volumes have more than doubled over the last four years, with €17.8bn invested across Europe in 2018, according to CBRE.

Overall, and €52bn of cross-border capital was committed to European multifamily housing between 2015-2018, the report says.

While European investors are still responsible for the largest share of the capital flows, the percentage fell to 50pc in 2018 from 67pc in 2011.

North American financiers are the most active capital source from outside Europe, having increased their share of capital flows to 44pc in 2018 from 24pc in 2011.

The top destinations for cross-border multifamily investments were Berlin, Copenhagen and London, which are cities with established multifamily markets, or rapidly increasing numbers of purpose-built rental developments.

Marie Hunt, director and head of research at CBRE Ireland, said: “Multifamily housing in Europe is an evolving market with strong potential for further growth.”

“There was a record €57bn invested into multifamily housing in Europe in 2018, but this is dwarfed in comparison to the US, which has the most mature multifamily market in the world.”

“Investment into US multifamily grew from $22bn in 2001, to $175bn in 2018, making it the dominant real estate investment sector there. Given the strong investor appetite, and the continued supply-demand imbalance, Europe could follow a similar trajectory - a trend that is already very much in evidence in the Irish market considering the year-on-year growth in investment being witnessed.”

So far this year more than 40pc of investment in real estate in Ireland comprised of residential investment.

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