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Investment in Irish commercial property may have fallen 42% from €6.1B in 2016 to €3.5B last year, but new analysis by Cushman & Wakefield reveals that overall spend on property — including by individual homebuyers — was up 1% to €17.9B.
The value of residential property deals jumped by 24% to €14.4B last year and accounted for 80% of the overall spend, up from a 66% share in 2016.
Dublin accounted for 52% of the overall €17.9B and 67% of the commercial spend. However, the €9.9B spent in Dublin was 9% less than in 2016.
Around €1B was invested in PRS, block sales and student accommodation during the year, representing 7% of residential capital flows. Some of the big deals in this sector included Patrizia's purchase of Honey Park in Dun Laoghaire for €132M, and Tristan Capital and SW3 buying 138 units in Elmfield in Leopardstown for €51M.
Some 65% of the residential investment was in Dublin, while Cork accounted for a further 10% with spend in the county more than doubling from €49M in 2016 to €104M in 2017.
On the commercial side, the agency said a key feature of the market was a decline in value turnover due to the presence of smaller lot sizes and single asset transactions.
However, some megadeals did happen, including Irish Life’s €125M-plus acquisition of 13-18 City Quay; the sale by Hines of eight office blocks in Cherrywood to Spear Street Capital for €145M; JP Morgan’s €125M purchase of 200 Capital Dock; and the sale of The Square in Tallaght to Oaktree Capital for €250M.
While the office sector made up 43% of direct commercial (excluding development and agricultural land and hotels) investment spend at €909M, Cushman & Wakefield described the industrial sector as the star performer, with sales increasing more than 60% from €96M to €154M.
Cushman & Wakefield Chief Economist Marian Finnegan said 2018 looks set to be another solid year for investment in the property market. “Commercial investment alone for the first half of the year is significantly higher than the same period last year,” she said. “Notably, led by a number of larger value transactions and an uplift in overall development land transactions, the commercial property market looks set to exceed 2017’s performance.”
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