Dublin's private rental sector has seen €7B invested since 2016 and has outperformed every other investment asset class in the country over the past three years, new research has found.

The latest investment report by Hooke & MacDonald found that €7B had been invested from both Irish and international funds and had facilitated the construction of over 12,000 new homes, housing up to 25,000 people.

The report highlighted that demand for PRS in Dublin had “continued to deepen” in 2021, with capital investment demand remaining strong.

“Investor interest and demand for good properties remained strong and we continue to see new capital targeting Ireland for the first time, as well as established investors increasing their portfolios," the report said.

“A diverse range of investors are active in the space, and this supports funding, increased construction and supply and provides a healthy market for forward  commitments, valuations and any resales of built stock.”

The report noted that Dublin’s suburbs had become the hotbed of development, with 85% of new multifamily developments taking place outside of the city centre.

There were 4,670 multifamily properties sold in Dublin in 2021 across 36 main transactions that had a value of over €2B; 87% (4,075) of these were new-build properties and 13% (595) were existing stock.

The report noted that “The largest sale was the Ardstone transaction involving multiple developments in the Greater Dublin area worth a reported €450M for approximately 900 new-build properties".

The largest transaction in a single location in 2021 was the first major Irish residential forward-funded sale, of 435 apartments at Eighth Lock, Royal Canal Park, Dublin 15 for €200M. The scheme is being developed by Ballymore Group and forward-funded by Union Investment. Hooke & MacDonald advised Ballymore on the transaction.

The strength of the PRS market comes as Irish developer Glenveagh’s chief executive called for up to 400,000 homes to be built in Ireland over the coming decade. Hooke & MacDonald's report noted that just over 20,000 new homes were built in Ireland in 2021.

That figure could rise to 26,000 in 2022 and 31,000 in 2023.