Record €3.5bn invested in Irish property market to date this year

Close to €800 million was invested in the Irish property market in the third quarter, bringing total volumes to €3.5 billion in the first nine months of the year.

This marks the highest volumes recorded in the January to September period and is double the number seen for the first three quarters of 2020.

Real estate firm Savills Ireland, which compiled the figures, said it expects to see year-end totals of between €4.75 billion and €5.25 billion.

The figures comes as CBRE Ireland says there has been a “very notable increase” in investor activity in the industrial and logistics sector of the market, with more than €442 million invested in industrial investment properties in Ireland to date this year. This is considerably higher than annual investment figures in recent years, which last year was just below €300 million.

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Savills said investor appetite was strong across the board, but with the multi-family sector continuing to out-perform the rest of the market with €414 million worth of assets traded in the third quarter. This accounted for 52 per cent of all investment volumes.

In total, multi-family assets with a value of €1.9 billion have traded this year, giving the sector a 54 per cent market share.

Retail sector

The retail sector accounted for €107 million in investments in the third quarter, equivalent to 14 per cent of all volumes and the first time it has accounted for more than 10 per cent of sales since the first quarter of 2019.

Investment in the office sector during the third quarter totalled less than €140 million. Savills said it expects volumes to pick up in the final three months of the year with the sector beginning to rebound from the impact of the Covid crisis.

"Conditions in the investment market seem to have returned to relative normalcy as restrictions have been reduced throughout the year. Twenty-twenty was defined by two lost quarters, with travel restrictions hampering the ability of foreign investors to physically come to Ireland, while in-person viewings also faced serious disruption throughout the year," said Brendan Delaney, divisional director of investments at Savills.

“We are now seeing a resumption of the strong levels of activity present before the pandemic, with several large deals that are close to signing set to drive a strong fourth quarter,” he added.

Industrial and logistics sector

Meanwhile, CBRE’s report shows Dublin’s industrial and logistics sector continued to perform well during the third quarter, with take-up reaching 70,678sq m in 39 individual transactions during the third quarter, bringing the total take-up in the capital in the first nine months of the year to 182,877sq m. The report says activity in the sector has been boosted by an increase in ecommerce activity in the last 18 months, but demand has also increased as a result of Brexit and changes to supply chain and distribution, as an increasing number of companies bring their distribution in-country.

Marie Hunt, head of research at CBRE Ireland, said: “Although largely occurring in off-market processes, transactional activity in the industrial and logistics sector has been buoyant throughout the first nine months of the year, with activity comprising a combination of large pre-lettings of new buildings as well as sales and lettings of existing facilities.

“The expectation is that this strong momentum will continue into Q4, with several large off-market transactions due to complete and feed into take-up numbers before year end. Despite the volume of activity recorded in the first nine months of the year, demand for industrial accommodation has almost doubled quarter-on-quarter, which suggests continued momentum in this sector for the foreseeable future.”