Strong Rebound In Property Investment Market Expected During Final Quarter
Irish Economic growth forecasts were not the only forecasts being revised upwards last week. With the resumption of overseas investor visits to Irish properties, some agents have revised upwards their expectations for the total value of investments that may be completed this year.
JLL’s managing director John Moran is now forecasting “end of year volumes to be €4.5bn.” That’s about one billion euros more than JLL was forecasting earlier this year.“Investment market conditions remain strong. Currently, there is a significant amount of property for sale which is being met by good investor demand. All sectors of the market remain active and with the recent strong performance of logistics and PRS, we are now starting to see a surge of activity in retail,” he adds.
Michele Jackson of TWM concurs but qualifies her comments. “It could even climb as high as €5 billion but it will very much depend on whether the bigger offerings currently for sale get over the line by Christmas,” she adds.Among the more valuable investments currently for sale is the Serpentine consortium’s 38% stake in four office blocks at the Facebook campus in Ballsbridge for which Cushman & Wakefield is quoting €395 million.
Total deals during the first nine months of this year were estimated to be worth about €3.5 billion, With the final quarter usually the busiest as traders try to complete deals before the year end, this period is expected to see deals top the €1.5 billion figure which would be larger than any of the earlier quarters.
One of the largest deals in the third quarter was the purchase by Eamon Waters of Beauparc Utilities, the owner of Panda waste recycling, of Royal Hibernian Way on Dublin’s Dawson Street. He is reported to have paid in the region of €74 million which was less than the €80 million quoted by joint agents JLL and TWM on behalf of the vendor Aviva.
The RHW investment is underpinned by office occupiers Davy Stockbrokers, while retail and hospitality occupiers include Carol Clarke Jewellers, Leonidas Chocolates, Marco Pierre White steakhouse, Isabelle’s restaurant and the Lemon & Duke bar.
With early indications suggesting that about €1.9 billion of residential investments may have been achieved in the first nine months of the year, Ken MacDonald of Hooke and MacDonald says the full year figure could reach as much as €2.3 billion. “That could account for almost half of the investment market, depending on what office deals are done in the next few months,” he adds.
Among the biggest PRS deals in the third quarter was the forward sale of 211 apartments built by Kimpton Vale at the Windmill project in Clonsilla. Brokered by Hooke and MacDonald, they were forward purchased for approximately €73 million by Urbeo.
Meanwhile in the smaller deal size above half a million, the end of September Bid X1 auction saw a number of commercial investments sell well above the guide price. Among them was 7 and 8 Crag Avenue Business Park, Clondalkin Industrial Estate, Dublin 22, which sold for €810,000 or 54% over its €525,000 guide price. In Limerick a detached office and detached warehouse investment on a 0.7 acre site known as Trinity House, Annacotty Business Park sold for €705,000 or 18 per cent over its €595,000 guide price.
By Donal Buckley
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