Friday 17 November 2017

Kennedy Wilson rules out an Irish property bubble

Fears of a property bubble in Ireland have been dismissed. Pic Frank Mc Grath
Fears of a property bubble in Ireland have been dismissed. Pic Frank Mc Grath
Nick Webb

Nick Webb

FEARS of a property price bubble in Ireland have been dismissed by US property fund Kennedy Wilson, which is the largest buyer of Irish residential property in the market.

Mary Ricks, president and CEO of Kennedy Wilson Europe, told investors last week: "There are still a lot of assets that will change hands and we still like the market outlook quite a lot.

"When we look at a 10-year average that CBRE has given us on cap value per foot and yields, we're still well below 10-year averages in Ireland, specifically in Dublin. So we're very bullish on the market and the pipeline that we have.

"There are still quite a few opportunities to buy assets – generally from receivers, because the banks are selling their assets. We have completed transactions with over 15 financial institutions, either buying debt or buying assets directly from receivers."

Kennedy Wilson has noticed a growing trend for renting over house buying across its operations.

According to its chief executive Bill McMorrow: "The same thing is happening in Dublin of all places, and you've also got this going against a framework where the renters between the age of 25 to 35 are not as inclined today to buy houses, they'd rather have the flexibility of renting."

Last week, the US venture capital firm agreed to buy a group of shops, offices and homes for €472m, its first foray into Ireland since it floated on the stock market earlier this year.

The latest deals include a portfolio of residential and commercial properties located in Dublin, for €88m, and another portfolio of office and retail properties across Dublin and Cork, for €391m.

"Our first Irish acquisitions are complementary to our growing portfolio and reinforce our investment strategy to invest in value-add assets within markets with strong fundamentals and high return potential," Ricks added.

Kennedy Wilson has been the most active buyer of Irish property loans and assets as the banks deleverage and Nama offloads chunks of its portfolio. The latest deal at Central Park is unlikely to be the last time that the US firm writes a big cheque here.

Bill McMorrow added: "We have a very strong pipeline, I'll leave it there. I don't want to really put a number on it and I don't want to kind of annualise the $800m we did in the first quarter.

"But if you'd kind of divide the $12bn over the last four years, we generally have settled in a range of right around $3bn of acquisitions each year."

Sunday Indo Business

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