Plucky little Ireland has gone one better than its European peers: while most markets have seen big increases in real estate investment volumes, activity in the small island nation has outstripped the peak in 2006.
Plucky little Ireland has gone one better than its European peers: while most markets have seen big increases in real estate investment volumes, activity in the small island nation has outstripped the peak in 2006.
According to the latest analysis from property advisor CBRE, over €1.37 bn was invested directly via €1 mln-plus deals in the recovering Irish commercial market in the first six months of 2014. That figure does not include loan sales.
Reflective of the strong volume of sales activity recorded over the last six months, the volume of investment spend in the first half of 2014 is higher than that achieved in the first half of 2006 when the market was at its peak and €1.09 bn was transacted.
CBRE also said that the the volume of investment sales recorded in the first half of 2014 is 19% higher than the 10-year average annual spend for the first half of the year.
According to CBRE Research, 77 individual transactions of over €1 mln in value were completed in the Irish market in the first six months of 2014.
The largest transactions were the sale of Central Park, Leopardstown, Dublin 18 for €311.15 mln; the sale of 72.8% interest in Liffey Valley Shopping Centre, Dublin 22 for €250 mln and the sale of The Platinum Collection of office buildings for €165 mln.
The investment volume would have been even higher in the six-month period if all of the transactions agreed recently had completed by end-June, CBRE said. Several investments agreed in recent weeks including the significant Project Sapphire transaction which amounts to approximately €375 mln will be counted as Q3 transactions and will therefore boost spend in the second half of the year.
The sale of portfolios of assets has been an emerging trend in the Irish investment market in 2014 and looks set to continue to be so over the rest of the year, as a number of large portfolio transactions are either on the market or are expected to be launched for sale over coming months.
[B}RISING REITS
The emergence of Irish REIT vehicles including Hibernia REIT, Green REIT and IRES REIT over the last 12 months has had a notable impact. Combined these new vehicles accounted for 39% of the total spend in the Irish investment market during the first half of 2014. A further 22% of the investment spend in H1 2014 was carried out by investment funds, while institutional funds accounted for a further 20% of the spend.
Office and mixed-use investments comprised the majority of properties transacted over the first six months of 2014. However, there has been a notable increase in investment in retail assets over the last six months with 24% of spend during the period comprising retail assets in comparison to the same period in 2013 when just 8% of investment comprised retail investment.
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