Knight Frank Ireland Expands Under Sherry FitzGerald's Ownership

As the dust settles on one of the biggest Irish agency deals in years, Knight Frank Ireland is looking at expansion. 

Real estate adviser Knight Frank officially became part of Irish residential giant Sherry FitzGerald in mid-February after the Competition and Consumer Protection Commission gave it the green light for a deal to buy HT Meagher O’Reilly and HT Meagher O’Reilly New Homes, which trade as Knight Frank Ireland.

Sherry FitzGerald, with a network of around 105 branches, of which 31 are directly owned, has a market share of about 15% in residential property and owns the Simon Brien agency in Northern Ireland. But it was a very small player in commercial real estate — until now.

With Dublin's office and industrial sectors finally starting to take off as big deals reignite the transactional market, Knight Frank Ireland co-founder and Director James Meagher sat down with Bisnow to outline how the company plans to become a major player and why it believes occupiers are going to have to make hard choices with a space crunch on the horizon. 

“There’s certainly no slowdown of growth," Meagher said.

"The Dublin office market has rebounded, and the development land team is busy with the push for new houses and the reforms around private residential rental and rent caps."

It was last autumn that CastleGate Investments — the privately owned company led by Tommy Kelly which bought Sherry FitzGerald in 2022 for €50M — first announced it was to acquire Knight Frank Ireland in a deal that saw Sherry FitzGerald return to the commercial property market it exited in 2018, when it sold the remaining 80% stake in its commercial arm to Cushman & Wakefield.

Meagher said the fundamentals underpinning growth in Dublin remain very strong and will fuel a recovery, from population growth to demographics to the strength of the wider economy. The residential market also has huge potential, he added. 

“There’s an enormous opportunity in residential, but it’s about delivery," he said. "We’ve got the major players in Glenveagh, Cairn Homes, Evara and so on, and there has been a positive shift in planning, making the development picture far more positive.

“My view is that we need to encourage more international developers into Ireland to help us to try and build the number of houses we need.”

That’s because, despite the major players active in the housebuilding market, the scale of the challenge requires the investment and labour power that can only be drawn from having more companies active in a market that Meagher said he believes is finally unlocking.

“There’s a more promising feeling now, but we also have to reflect on the wasted years. It felt like there was a cottage industry in making complaints,” he said. “Clearly, the change in rent caps has successfully changed the market.”

As part of the acquisition, Knight Frank has also been busy adding to its team. Jennifer McNamara recently joined from Arcadis as director and head of building consultancy and will work alongside the firm's established architectural and design specialists.

In addition, Emmett Page has joined from Colliers as director and head of valuation and advisory services, and James Farrelly has joined, also from Colliers, as director in professional services.

The company is also looking to expand its commercial real estate arm, and Knight Frank Ireland Director Declan O’Reilly pointed to a turning point in the market this year, as the office space crunch starts to influence rental levels.

“Essentially, by the end of this year, there will be no more new stock that hasn’t been pre-let, and we’re already seeing indications that the prime stock will lease at between €70 to €80 per SF, whereas rents were in the €65-to-€70 range at the end of last year,” O’Reilly said.

“I think we’ll see occupiers prepared to pay the higher rents, because, ultimately, they are not coming to Dublin or relocating for low rents. They want amenity-rich spaces in the right locations, which increasingly means in the centre of the city and in microlocations but largely not out of town,” he added of market trends.

However, while occupiers are ramping up their search for new space as they become aware of declining choice for Grade A, high environmental, social and corporate governance-rated buildings, the money is not necessarily following, despite a couple of €100M-and-above transactions in recent weeks.

“Despite these, there is limited appetite for spec finance, which, to be honest, surprises me. That means that if we do see speculative development, it’s most likely to come from well-financed developers who can dip into their own reserves,” O’Reilly said.

But it will still take about 30 to 36 months for any scheme from getting the go-ahead to be built, and that means Dublin is facing a modern office space crisis.

The industry will have to look for some short-term solutions, and that might mean some older buildings that were not previously viable get refurbished, even if these are short-term lets while occupiers wait for larger buildings to be completed, O’Reilly said.

“There are also some high-quality buildings out of town, where vacancy rates are much higher. So that’s another possible interim solution, but a temporary relocation to the suburbs is a big call for businesses,” he added.

Meagher also pointed to more activity among industrial and logistics portfolios, with several trading or under offer recently, and stressed that Ireland’s role as a safe haven for capital and its resilient economy should continue to underpin growth across sectors.

“Sometimes, we forget how much we’ve achieved with the strength of our economy, which has been amazing over the years, and right now, I think there is a positive feeling within the industry,” Meagher said.