Sales of development land up 11% as builders jockey for residential sites

The value of development land sales in Ireland last year rose 11 per cent to €648 million, according to a new property report from the agency Savills.

The company said almost six out of every 10 land deals last year were for sites in the buoyant residential sector. A further €450 million worth of land deals are currently sale agreed, or the lands are being marketed. It said this made it confident of another “robust” year for land sales in 2022.

In commentary accompanying its Irish Development Land Market report, Savills said land in prime areas with planning permission in place attracted strong bidding across sectors.

“Even sites without planning permission have performed well if they are sufficiently well located, as evidenced by the sale of City Quay for €40.5 million in Q3. The price achieved was well ahead of the guide of €35 million and attracted a deep pool of bidders.”

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The report highlights that the largest land deal last year was Eagle Street Partners’ €78 million purchase of a six-acre site at Castleforbes Business Park.

Hampered

Savills said 2021 was a year of two halves for the sector, with site inspection hampered by coronavirus restrictions in the first half. Activity picked up in the second half, with 64 per cent of the value of all land sales between July and December.

Savills said the property industry is hoping that the new large-scale residential development (LRD) laws to speed up housebuilding will succeed where the old scheme, strategic housing development (SHD), had “failed”. It welcomed an increase in the “speed and clarity” of the new system, but raised a concern that projects under the LRD scheme could still become bogged down in court proceedings by objectors, as happened with many SHD schemes.

Savills also warned that local authority moves to limit the number of build-to-rent schemes had brought some “uncertainty” to the land market.

"For the year ahead, the strength of the industrial and logistics investment market is likely to filter through to the development land market," predicted John Swarbrigg, Savills' director of development agency and consultancy.