Irish investment to hit €1b in 2013: Savills

Irish real estate investment volumes could reach or even exceed €1 bn in 2013, according to adviser Savills.

The estimate marks a near-doubling of the investment volume of €576 mln recorded for 2012.

Savills said the figure is based on the volume of deals that has already been agreed or is in the process of being concluded, which stands at €240 mln so far compared to just €50 mln during the same period in 2012. A further €200 mln of stock is available and demand is expected to gather pace throughout the year, says Savills.

Domhnaill O’Sullivan, investment director at Savills Dublin, said the level of interest in prime office and retail assets in particular is expected to remain strong. ‘The prices achieved on investment properties sold in 2012, combined with the calibre of purchasers and known under-bidders is enticing fresh capital into the market, which will act as a catalyst to create further competitive tension in the Irish investment market and with it capital appreciation.’

Savills expects demand to focus on larger lot sizes (in the €20-50 mln bracket) with secure income in the office, retail and residential sectors, a similar trend seen in 2012.

In addition, the firm predicts that there will be active interest in the sub €5 mln market as private investors seek to take advantage of the capital gains tax exemption that applies to properties acquired by the end of 2013 and that are held for a minimum of seven years.

Whereas private equity investors dominated the Irish commercial property investment market in 2012, Savills expects more institutional and core buyers to emerge for prime assets this year. The firm also predicts continued interest from US and private Irish investors as well as a return to the market for the Irish institutions that have not been active on the acquisition front for a number of years.