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Can BTR Dominate Dublin's Resi Market For The Next Decade?

Cranes in central Dublin: The city accounts for over 70% of all new multifamily schemes in Ireland.

It has risen to be the most sought-after investment prospect for investors both international and domestic looking to place their funds in Dublin, and has sky-rocketed as a share of Ireland’s commercial real estate market in the past half-decade.

But can the market sustain the relatively high investment volumes that build-to-rent schemes have commanded over the past few years, and is the sector well-placed to dominate as the prime asset class in Ireland real estate for the best part of the '20s?

A good place to begin assessing the prospects for BTR is the planning pipeline. Ireland’s Central Statistics Office planning approvals figures showed that despite falling as a proportion of total homes being built, the number of apartments has seen significant growth. In 2017 5,336 apartments received planning approval; by 2021 this had risen to 26,272.

With a total of 18,908 approvals in 2021 alone, Dublin made up 72% of Ireland’s total BTR planning approvals in the past 12 months. As a sector private rented residential overtook offices as the primary investment sector within Dublin’s property industry in 2019, when it accounted for 44% of the total €5.5B investment pot, compared to 32% for offices.

In 2020, both multifamily and offices took up 40% of the €3B invested, and in 2021 multifamily took up 43% of the €5B market, compared to 22% for offices. That is in line with global trends.

“Investment in Irish residential real estate has been increasing strongly over the past five years and now accounts for close to 50% of total turnover,” said Kate Ryan, Colliers Ireland’s director of research.

“The majority of investments involve forward-commit build-to-rent assets, and with permission granted for 50,000 apartments in the past two years alone, there is no shortage of opportunities. Prime PRS yields are in the region of 3.6-3.75%, which is attractive relative to yields being achieved in other cities across the UK and EU.”

Major schemes to change hands over the past 18 months include 8th Lock in Ashtown, Dublin 15, which was bought by Union Investment Real Estate for €200M in Q2 of 2021. Cheevers Court in County Dublin sold for €195M to a DWS and SW3 Capital joint venture in autumn 2020.

In fact, there is no shortage of investors looking to buy into the multifamily market.

According to research by Colliers, SW3 Capital has been one of the most active investors in the sector, with three transactions totalling €467M alongside joint venture partners.

Ardstone Capital has also actively sought out portfolio opportunities in 2021, securing among other purchases a 900-unit portfolio of properties across Greater Dublin for €450M, as well as the 401-bed Dwyer Nolan Portfolio for €181M in the first half of last year.

"Total residential volumes were €2.3B in 2021, which was another exceptional year," CBRE Ireland Associate Director, Research & Consultancy Colin Richardson said.

"I think we could come close but not quite reach the same level as last year. Rental demand in Q1 has soared and there is a lot of competition for any and all available stock. Rents are continuing to creep up."

A recent report from noted how asking rents had steadily risen over the past 12 months. The November rental report noted that availability of homes was at an all-time low. "In line with basic economy theory, tight availability is the harbinger of rising rents," the report said.

Current rent levels could be set to rise even further due to shortages of availability. With this in mind, the next phase of developments coming out of the ground could lead to record rents and yields in coming years. Bisnow has picked a select number that could be worth watching over the coming year.

Cherrywood Town Centre

Boasting 760K SF of retail space and 1,300 build-to-rent apartments, the Cherrywood scheme by Hines and APG south of Dublin is promoted as Ireland’s largest urban development. The 360-hectare strategic site lies 10 miles south of Dublin city centre with the residential Cherrywood Village element occupying 65-acres of the wider scheme. The village is anticipated to be fully occupied by 2025. 

Griffith Wood

Griffith Wood has been drawn up by Cairn Home and was bought by U.S. giant Greystar in July last year for €177M. The scheme on Griffith Avenue in Marino, Dublin 3, is set to include 385 homes. 

Blackwood Square

Round Hill Capital and QuadReal Property shelled out €123.5M in November 2020 to acquire one of Dublin 9's new schemes in the shape of Blackwood Square, which is being developed by Cosgrave Property Group. When the final phase of the scheme is completed, anticipated to be in October this year, the scheme will include 297 build-to-rent apartments.

The scheme will be arranged in four eight-storey blocks and will house four one-bed apartments, 243 two-bed apartments and 25 three-bed homes. The scheme will also include two one-bed penthouses, 15 two-bed penthouses and eight three-bed penthouses.

8th Lock

Developer Ballymore gained planning for 435 homes at Royal Canal Park in Ashtown, Dublin 15 in May 2020. The scheme, also known as 8th Lock, is located on the former Ormond Printworks site, will form the fourth phase of the wider Royal Canal Park scheme.

It includes 218 one-bed and 217 two-bed homes and around 42K SF of commercial space. Union Investment Real Estate purchased the site in April 2021. The scheme itself is set to complete between October and March 2025.

Dublin Glass Bottle Site

Looking further ahead, the Glass Bottle Site will dominate Dublin's multifamily pipeline for the coming half-decade. Developed by Ronan Group, the 37-acre site is split into seven phases and will include a total of 3,800 apartments.

To give an example of the Glass Bottle site’s scale, the development total is almost comparable to the entire residential completions for Dublin in 2021, which were a shade higher at approximately 3,900. The first phase, which itself is split into three subphases, will include 600 apartments, a creche and 400K SF of retail space.

What exactly is going on in the Dublin residential market? Find out the latest industry insights at Bisnow's Housing Update on 10 May.