Investment up as €64m spent in third quarter
A total of €64.4m was invested in Irish investment properties in the third quarter of the year, bringing to €170m the amount of investment seen over the first three quarters of 2010.
These are among the latest findings from a survey by CB Richard Ellis who points out that while the figures are significantly less than those seen at the market peak, they are well ahead of the €92m invested last year.
Marie Hunt, director of CBRE, Ireland also points out that the figures demonstrate that it is untrue to say there is currently no activity in the commercial property sector.
"The figures do not include a number of large transactions which are ongoing but not yet signed," she adds.
The largest transaction in Q3 was the sale and leaseback of the AIB bank branch on Dublin's Grafton Street to a German buyer for approximately €28m.
During Q3, there were seven investment transactions completed and signed, of which three were retail transactions, one was an office building, two were industrial properties and one was categorised as other.
Retail properties accounted for almost half of the value of investment sales completed in Q3 with offices accounting for just more than 30pc by value.
The key difference between now and the peak of the market is that most of the investment interest is now emanating from institutions overseas, particularly the UK, Germany and the US -- a radical departure for a market that was heretofore wholly dominated by Irish debt-funded purchasers
There were a total of 16 investment transactions completed in the first nine months of 2010, of which 10 were retail investment properties, three were office properties, two were industrial buildings and one was categorised as other.
The recent period also saw a UK investor, London and Regional, pay almost €20m for the eircom Management Centre at Citywest Business Campus in Dublin 24, which effectively worked out as a net yield of 8pc. DTZ Sherry FitzGerald acted for eircom and Sean O'Neill acted for the UK investors who are also interested in acquiring other Irish property prospects.
Sean O'Brien, director CBRE, says there is no shortage of buyers.
"Over the last 18 months, CBRE has hosted a wide variety of overseas property companies, funds and equity or finance houses, along with banks and analysts visiting Dublin.
"However, there is a dearth of sellers, as owners and their banks are reluctant to sell at current values in the mistaken belief that values will recover significantly soon," he adds.
Maurice O'Neill of DTZ Sherry FitzGerald, who acted for eircom in its recent deal, also points out that overseas investors prefer office buildings with long secure income of more than 15 years and these investment prospects are in relatively short supply.