AIB Bank Centre sale helps boost investment turnover up to €270m
Investment turnover in the third quarter of this year amounted to €99m bringing to €270m the value of transactions in the first nine months of the year. These are among the findings in two surveys published by Lisney and CB Richard Ellis. Meanwhile rivals Savills forecasts that turnover will reach €500m by year end and €700m in 2013, the strongest level of take-up since pre the beginning of the downturn in 2008.
Two significant Dublin 4 office sales were seen in Q3, the largest of which was the sale of part of AIB Bank Centre in Ballsbridge for €70m and the sale of Brooklawn House in Ballsbridge for about €15m to Kennedy Wilson.
"This price gives an interesting benchmark of €3,500 psm for a modern office building with short-term rental income," says Lisney investment specialist Duncan Lyster.
At the smaller end, four retail properties in the quarter sold for less than €1m mainly to cash buyers. Returns for the four ranged between just under 8pc to double digits with remaining income lengths varied.
For the third quarter in a row supply has increased with 15 investments on the market since the start of September with a combined asking price of €257m.
These include the State Street building on Sir John Rogerson's Quay (quoting €105m including the adjoining site), the Gemini portfolio (quoting €75m) and the freehold interest in five blocks in Spencer Dock quoting €22.5m.
Marie Hunt of CBRE says the investment spend in the first nine months of 2012 is higher than the volume of investment in the Irish market in each of the last three years.
Overseas buyers accounted for more than 71pc of the investment spend to date and offices attracted two-thirds of the spend.
"A further 15pc comprised bulk residential investments, 11pc industrials and 5pc retail properties."
Aoife Brennan, Lisney's head of research, also points out that in addition to the sales, a further €88m of investment property is currently sale agreed.
Just under €570m of investment property is publicly for sale.
The institutions/ traditional property funds account for approximately 30pc of this, while receiver sales, and disposals by banks and private individuals account for the remainder.
She also reports increased activity in Cork for well-let properties as reflected in a Bank of Ireland premises in Ballincollig for which terms are agreed at close to the asking price of €4.4m, which reflects a yield of about 7pc.
In Dublin she reports that yields have held steady except for offices where they have improved slightly.
As regards the future she points to AIB providing funding which should help purchasers and she also expects office yields to compress further.
Meanwhile Joan Henry, director of research at Savills Ireland, says that Dublin's prime office market is leading the way in terms of a recovery of the commercial occupier markets and rents in the sector will trend up by year end and into Q1 2013.