Thursday 22 March 2018

Investment levels fell sharply in the second quarter, say BNPPRE

Shopping centre sales accounted for the bulk of the €348m spent outside Dublin
Shopping centre sales accounted for the bulk of the €348m spent outside Dublin
Peter Flanagan

Peter Flanagan

Turnover in the investment market slumped 30pc during the second quarter of this year, but what deals were done were split evenly between Dublin and the rest of the country.

That may indicate that the recovery in the commercial property market is now moving steadily beyond the capital and into the provinces, even while investors voice doubts about the strength of the recovery further afield than the capital.

In its latest report on the state of the investment market, BNP Paribas Real Estate said sales came in at €671m between April and June.

That was down sharply on the first three months of this year.

BNP Paribas Real Estate head of research Joan Henry commented: "While the sale of prime offices continued to dominate activity in the Dublin investment market in Q2, investors looking for retail opportunities focused on shopping centre assets out of the capital".

"Investor spend in Q2 was split almost 50/50 between Dublin and the rest of the country - a trend which indicates that the market has entered a more mature phase in the current cycle," she added. Kenneth Rousse of BNP Paribas Real Estate's investment team said that "Retail opportunities are set to remain a key theme in the market over the coming months as investors' look to tap into the rental growth cycle in this sector".

Investor spend on retail in the Dublin market was low in Q2 - partly due to lack of supply on the market in the capital and partly due to the amount of opportunities that came to market outside Dublin. At a total of €10m spread over six transactions this level of spend in Dublin can be considered unusually low/quarter specific with retail opportunities expected to reemerge as a key theme over the next year, said the firm.

About €348m was spent outside of Dublin - dominated by shopping centre sales, against a backdrop of much improved retail sales and strong employment growth data. The

Cornerstone Portfolio consisting of six shopping centres, in six counties was the largest retail transaction, achieving a price of €117m.

"A tenth of total market turnover was in the office sector outside of Dublin, a significant percentage and once again an indication of the wider confidence in the economy and property market as a whole. There is a strong pipeline of deals in progress as well," said the company.

Sunday Indo Business

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