With estimates among industry experts for this year’s transactional activity currently at €4.5 billion-€5.25 billion, 2021 is shaping up to be an extraordinary year for Ireland’s commercial property sector.
While either of these figures would represent a strong outturn for the market in ordinary times, the performance is all the more remarkable when one considers the ongoing obstacles being thrown in the way of almost every aspect of our lives by Covid-19.
As the virus approaches its second Christmas, having morphed into the Omicron variant, nobody can say for sure if we are closer to the end or to the beginning of this pandemic. But life goes on as they say, and investors continue to take the long-term view when it comes to the prospects both here and internationally for the private rented sector, offices, and logistics markets.
As is evidenced by the Top 10 deals below, the ongoing housing shortage continues to offer opportunities and the prospect of a stable income for pension funds and other vehicles for “patient capital”, while offices have come through the existential crisis they faced in the early days of Covid-19. The twin threat of the pandemic and the UK’s tortuous tussle with the EU meanwhile sees the logistics sector consolidate its position as one of the most sought-after asset classes for the second year in succession.
1. The Ardstone portfolio, €450m
Ardstone Capital, the investment firm founded by former Friends First senior executives, set the tone for Ireland's commercial real estate market and for the private rented sector particularly in the first quarter of the year with the forward purchase for €450 million of more than 900 residential units under development or due to be developed in various schemes across the greater Dublin area.
2. Project Tolka portfolio, €290m
In February, the Competition and Consumer Protection Commission (CCPC) cleared the way for US private equity giant Blackstone's purchase for €290 million of a majority interest in two of Dublin's foremost office assets from another US investor, Colony Capital. The deal, which concluded in April, saw Blackstone secure ownership of a 75 per cent interest in the Burlington Plaza office complex on Burlington Road and a 72 per cent stake in the Three Building at 28/29 Sir John Rogerson's Quay and Whitaker Court.
3. 8th Lock apartment portfolio, €200m
Last March, the German investor Union Investment made its first investment in the Irish residential market, and one of its first residential deals in Europe when it agreed to pay €200 million to acquire 435 one- and two-bedroom apartments and a health centre being developed by Sean Mulryan's Ballymore Group at Royal Canal Park in Ashtown, Dublin 15.
4. Core industrial portfolio, €195m
Just last week, real estate private equity giant Palm Capital completed the purchase for more than €200 million of the Core portfolio, a collection of industrial and logistics assets distributed across Dublin and the greater Dublin area. The price paid represented a premium of 18 per cent on the €170 million joint selling agents, CBRE and Eastdil Secured, had been guiding when they offered the portfolio to the market on behalf of Core Industrial last April.
5. Dwyer Nolan apartment portfolio, €181m
In June, Ardstone Capital returned to the acquisition trail with its €181 million forward purchase of 401 one-, two- and three-bedroom apartments being delivered by Dwyer Nolan Developments at three sites in north Dublin. The portfolio is distributed across Santry Place, Hampton Wood in Finglas and Windermere in Clongriffin.
6. Griffith Wood apartment portfolio, €177m
The second quarter saw the completion of another major PRS deal on Dublin's northside, with US-headquartered property giant Greystar agreeing the purchase for €177 million of 342 apartments being developed by Cairn Homes at its Griffith Wood scheme at Griffith Avenue in Marino, Dublin 3. The deal represented Greystar's second transaction in the Irish market. Greystar made its first investment here in July 2019, paying €175.5 million for 268 high-end apartments at Dublin Landings, the million square foot mixed-use development delivered by Ballymore in the city's docklands.
7. Block A Riverside IV, €164m
The enduring appetite of investors for prime office assets with strong tenant covenants was firmly evidenced in June with Irish Life Investment Managers securing €164 million from the sale of Block A, Riverside IV – a prime office building located at 70 Sir John Rogerson's Quay in Dublin's south docklands – to German investor Deka Immobilien Investment GmbH. The sale of the property came just over one year after Matheson, Ireland's largest law firm, committed to a new long-term lease of the entire building at a rent of €55 per sq ft.
8. East Village apartment portfolio, €127m
In one of the first deals to take place this year, SW3 Capital and its partners, Blackrock, completed the forward purchase of 295 one-, two- and three-bedroom apartments being built by veteran developer Michael Cotter's Park Developments at its wider Clay Farm scheme in the south Dublin suburb of Leopardstown.
9. Adamstown apartment portfolio, €110m
In October, Dutch property investor Orange Capital Partners and Singaporean sovereign wealth fund GIC ramped up its investment in Dublin's private rented sector with a €110 million deal for 279 apartments being delivered by Quintain at the Crossings, its new €500 million urban hub development at Adamstown in west Dublin.
10. 76 Sir John Rogerson’s Quay, €95m
In March, German family office investor AM Alpha paid developer Targeted Investment Opportunities (TIO) €95 million for the newly completed 76 Sir John Rogerson's Quay in Dublin's south docklands. The sale of the prime waterfront office block came just four months after Dutch-headquartered lender Rabobank agreed to take 23,500sq ft (2,183sq m) of space at the scheme on a 10-year lease at a rent of €57 per sq ft, and with an option to renew for a further 10 years.
10. Liffey Park Business Campus, €95m
While Swiss-based investor Stoneweg SA's €95 million deal with the O'Flynn Group and Blackrock Real Estate Assets for the former Hewlett Packard (HP) campus is understood to have been agreed in November 2020, the sale of the 195-acre Leixlip scheme completed in April of this year. The Liffey Park Business Campus comprises nine buildings with a total floor area of 1.47 million sq ft. Current occupiers include Hewlett Packard Enterprise, Celestica, MGS and Global Entserv Solutions. Some 600,000sq ft of the existing built stock was vacant, while 70 areas of surplus development land remained available for development at the time of the sale It is understood this land could potentially accommodate about 700,000-800,000sq ft of new development.