Ireland’s commercial property market is recovering strongly with the volume of transactions more than doubling in the past 12 months, according to analysis by research firm Real Capital Analytics (RCA).
Ireland’s commercial property market is recovering strongly with the volume of transactions more than doubling in the past 12 months, according to analysis by research firm Real Capital Analytics (RCA).
A total of €3.63 bn of direct property transactions was recorded in the year to 30 September. The figure is 19% higher than the peak of the last property boom, in June 2007, when €3.05 bn changed hands.
The strong growth was driven by newly listed REITs such as Green REIT and Hibernia REIT, which were the second and third most active investors in Ireland in the 18 months to end-September. Overall REITs accounted for 28% of transaction volumes over the last four quarters.
In the 12-month period Green REIT accounted for €765 mln of transactions recorded by RCA, while Hibernia REIT bought assets worth €321 mln, including Guild House and Commerzbank in Dublin for €90.8 mln.
Private equity funds advised by investment manager Kennedy Wilson bought €1.04 bn of assets in the 18 months to September. Kennedy Wilson was also the most active seller in the same period, making €456 mln of disposals.
Simon Mallinson, RCA’s managing director for EMEA, said: ‘The introduction of REITs last year established a new breed of domestic buyer to target opportunities in the Irish market alongside the dominant US private equity funds.’
Increased demand for Irish real estate and the consequent rise in prices caused net yields for office transactions to fall to an average of 7% in the third quarter, compared to 9% in early 2013. The Irish economy grew by 6.5% year-on-year in the second quarter of 2014.