The value of development land sales rose to €490 million in the first half of this year in spite of a more than 50 per cent fall in transactions, according to research from commercial real estate agency Cushman & Wakefield.
The 16 per cent increase came as the number of transactions fell from 112 in the first half of 2018 to 54 between January and June this year.
Cushman & Wakefield said the fall in transaction volumes may be linked to rising development costs and mortgage limits for buyers.
By location, Dublin attracted the largest volume of funds with about €316 million spent across 19 transactions. Kildare was a distant second with €68.7 million transacted. Dublin and its neighbouring commuter counties accounted for 83 per cent of the overall value transacted in the period.
Outside Dublin and neighbouring commuter counties, Cork had the most active market, attracting 12 per cent of the total investment in the first half of the year. About €61 million was transacted in Cork in the period across 15 deals, an increase of 32 per cent on the same period in 2018.
Galway and Limerick saw a slight uptick in the value of transactions recorded with a total of €24 million transacted.
John Donegan, divisional director of development land at Cushman & Wakefield, said that the figures from the first half of the year suggested that turnover could exceed €1 billion by the end of this year.
“Results in the first half of 2019 are particularly impressive considering the emerging strength of forward commit deals in the private rented sector. Despite increased prudence from purchasers, competition remains strong for prime opportunities,” he said, noting that the sale of the former Irish Glass Bottle site in Ringsend, Dublin will test the strength of the upper end of the market.
In the second quarter, the largest transaction was Lone Star’s acquisition of 47.7 hectares (118 acres) in Cherrywood for a price reported to be in the region of €127 million. The land has capacity for more than 2,600 homes.
Another transaction of note was Marlet’s sale of a 4-hectare (10-acre) site at Cabra Road in Dublin, which has planning permission for 420 apartments.
The dominance of the residential sector continued in the first half of the year, with four of the top five sales for housing sites. Out of the total turnover, the value of residential sales was just over €370 million.