While this year’s estimated €6 billion investment in the commercial property market is obviously being flattered by upwards of €2 billion thanks to the sales of Hibernia Reit (€1.1 billion), Salesforce’s new European headquarters (€500 million) and a substantial portion of Meta’s Dublin 4 campus (€395 million), the other €4 billion plus in “ordinary” activity is remarkable when one considers the challenges precipitated by Russia’s invasion of Ukraine last February.
With rising interest rates and double-digit inflation combining since then to cool the ardour and the appetite of certain investors for assets previously considered to be proverbial sure-fire bets, the necessary period of “price discovery” (a polite term employed by commercial property advisers to manage the expectations of vendors and, to a lesser extent, buyers) continues.
An examination of the top 10 deals, below, points to one essential conclusion, however, and that’s the recognition internationally of Dublin’s standing as a location to deploy capital for the long term.
1. Hibernia Reit, €1.089 billion
The largest and most-valuable transaction by far this year took place in the second quarter, and saw Ireland’s largest listed office landlord, Hibernia Reit, being acquired by Brookfield for just under €1.1 billion. While the price paid per share represented a premium of 36 per cent to the closing price of Hibernia’s shares before the deal was announced, the Canadian asset-management giant secured ownership of a €1.3 billion portfolio of prime Dublin office assets with a tenant base that includes Twitter, Deloitte and Hubspot.
2. Salesforce European HQ, €500 million
The third quarter was barely under way when Blackstone Real Estate’s Core+ fund agreed to pay just over €500 million for Salesforce’s newly-developed European headquarter offices at Spencer Place in Dublin’s north docklands. The deal saw the US-headquartered investor, which has some $951 billion in assets under management globally, take ownership from Fortress Investment Group of the entire 413,000sq ft office campus developed by Johnny Ronan’s Ronan Group Real Estate (RGRE). The deal also included the 204-bedroom Samuel Hotel, which is let to Ireland’s largest hotel operator, Dalata Hotel Group.
3. Meta European HQ, €395 million
While the sale of a substantial portion of Meta’s (Facebook) European headquarters in Dublin 4 had already been agreed towards the end of 2021, its completion in early February of this year provides another significant boost to the overall value of transactional activity for 2022. Blackstone paid €395 million for the 31,536sq m (339,456sq ft) of office space across four existing blocks occupied by the social media behemoth to the rear of its new Ballsbridge campus, The four blocks had been owned by the Serpentine consortium, a syndicate of private individuals and companies assembled by AIB Private Banking and Goodbody Stockbrokers.
4. Project Sapphire, €161 million
The third quarter saw the so-called ‘beds-and-meds’ sector come to the fore with developer Richard Barrett’s Bartra property group securing €161 million from the sale of Project Sapphire to Belgian-listed real-estate investor Aedifica. The deal briefly comprised the sale and leaseback of three nursing homes (462 beds) in the Dublin area and one forward-commit (150 beds).
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5. Project Ruby, €145 million
The tail end of the first quarter saw US investment fund Bain Capital secure the sale of 813 student beds distributed across three blocks in Dublin (Blackhall Place and Cork Street) and Galway (Fairgreen Road) to Ares Management and Generation Partners. Unsurprisingly, all three blocks came for sale fully occupied.
6. Penneys (Primark) Distribution Centre, €129 million
In February, German investor Union Investment completed its forward purchase for €129 million of the new, 64,550sq m (694,810sq ft) warehousing and distribution hub being developed by Penneys in Newbridge, Co Kildare. While a total of 10 parties are understood to have expressed their interest in the Great Connell facility when it was offered it to the market at a guide price of €110 million-€115 million in September 2021, Union is understood to have seen off competing bids in the second round of the sales process from Australian financial services giant Macquarie, German investor Deka Immobilien and M&G Real Estate, which has its headquarters in the UK.
7. Brickfield Square, Crumlin, Dublin 12, €123.5 million
The most valuable private rented sector (PRS) sale so far in 2022, meanwhile, took place in the third quarter and saw US-headquartered property giant Greystar paying €123.5 million – or an average of €510,330 per unit – on the forward purchase of 242 apartments being developed by Brian M Durkan Ltd at Brickfield Square in Crumlin, Dublin 12. The acquisition, which was supported by debt financing from AIB, represents Greystar’s fourth transaction in the capital since its arrival in the Irish PRS market in 2019.
8. Magna Drive, Citywest, Co Dublin, €122 million
The second-most-valuable PRS transaction, meanwhile, saw Ardstone Capital paying €122 million in the second quarter to forward fund the construction by publicly-listed home builder Glenveagh Properties of 321 apartments at Magna Drive in Citywest. The price paid represented an average of €380,000 per unit.
9. Churchview, Killiney, Co Dublin, €110 million
Developer Michael Cotter’s Park Developments secured a significant coup in the third quarter with the sale for €110 million of the 190 apartments his company is delivering on a 3.75-acre site next to the well-known Graduate roundabout in Killiney to Deutsche Bank subsidiary DWS. The price paid by the German investor represents an average of €579,000 per unit. Park Developments acquired the south Dublin site itself for €9.5 million in November 2018.
10. St Edmund’s Drive, Citywest, Co Dublin, €105 million
Having already spent €122 million on the 321 apartments under construction at Magna Drive, Ardstone Capital returned to the acquisitions trail within weeks, paying €105 million – or an average of €416,500 per unit – for 252 apartments being delivered at St Edmund’s Drive. Taken together, the two transactions accounted for 18 per cent of the total spend in the second quarter of this year.
Other notable transactions in the year to date included Round Hill Capital’s €98 million forward-fund deal for 238 apartments being built by the Gem Group as part of its wider development of 331 homes on the Malahide Road in Dublin 17. In July, the Gem Group sold the remaining 93 apartments at the same scheme to German investor Real IS AG for €42 million. The latter units will be used for social housing following the agreement of a 25-year lease with Dublin City Council.
In the office sector, meanwhile, the €97.5 million sale by Spear Street Capital of the headquarters of Flutter Entertainment (formerly Paddy Power Betfair) at the Founders’ District (Belfield Office Park) on Beech Hill Road in Dublin 4 to LCN Capital Partners and Blackstone’s €92.25 million sale of the Watermarque Building in the city’s docklands to French investor Corum were also noteworthy.
