US REIT Starwood Property Trust and German fund manager Union Investment Real Estate pulled off big-ticket deals that accounted for over half of the €1 bn of commercial real estate traded in Ireland during the first three months of 2015.

US REIT Starwood Property Trust and German fund manager Union Investment Real Estate pulled off big-ticket deals that accounted for over half of the €1 bn of commercial real estate traded in Ireland during the first three months of 2015.

Starwood is the largest mortgage real estate investment trust in the US and the first US REIT to buy in the Irish market. The company is affiliated to private equity giant Starwood Capital Group.

In March Starwood agreed to acquire the Project Molly Dublin office portfolio from US private equity firm Lone Star for €350 mln. The portfolio consists of the Watermarque Building in Ringsend; the Iveagh Court complex on Harcourt Road in central Dublin and Marsh House located at 25 to 28 Adelaide Road in the Dublin 2 district.

In its Irish investment market report for Q1, JLL noted the assets were part of the Project Holly portfolio acquired by Lone Star from Irish bad bank NAMA in January 2014. Hannah Dwyer, head of research at JLL Ireland, said the Molly portfolio sale was 'evidence that opportunistic purchasers who have been active in the last 24 months are starting to recyle their purchases back into the market.'

Top deals
The next three largest deals during Q1 were also carried out by cross-border investors. Hamburg-based Union Investment Real Estate agreed to acquire Facebook's offices at 4 & 5 Grand Canal Square in Dublin's docklands district for €233 mln. Union Investment reportedly overcame rival bids from domestic insurer Irish Life and US investors Hines and JP Morgan to clinch the deal at a yield of just over 4%.

Hines secured the number three deal by volume by acquiring Bishops Square in Dublin 2 for €92 mln, while New York-based Marathon Asset Management purchased the Plum Portfolio of multi-family residential assets for €77 mln. Hibernia, one of the first generation of Irish REITS, chalked up the fifth largest transaction, buying the Harcourt Square office building for €70 mln.

JLL noted that 95% of the transactions for Q1 related to Dublin assets, and 85% of total volumes were for the office sector. Multi-family residential claimed 9%, retail 4% and mixed-use represented 2% of the overall €1 bn volume.

Overseas buyers dominated the market by accounting for 80% of the overall volume. Dwyer said that a significant number these investors are new to the Irish market and have a core investment style in contrast to the more opportunistic funds that have dominated the market until recently.

Dwyer said in the investment report that a number of large portfolios are expected to come to the market over the next six months and that this will likely contribute to a full-year 2015 volume of €3 bn for the Irish market.

For more, see Portfolio deals drive Irish market