The latest investment spend figures for the Irish commercial property market during the first half of 2018 show that almost €1.85 billion was invested in commercial property in Ireland during the first six months of the year, with more than €946 million having traded in the second quarter 2018 alone.
Property consultants CBRE Ireland say the cumulative spend for the first six months of 2018 is more than twice the volume traded in the first half of last year, which was approximately €775 million.
Following 2017 which saw more than €2.5 billion of assets traded in the Irish market, the first half of 2018 has seen continued activity in the Irish investment market with 86 individual transactions with a value of more than €1 million totalling more than €1.85 billion between them signed in the six-month period.
Somewhat unusually, there were 8 investment transactions extending to more than €100 million in value signed in the first six months of 2018, which significantly boosted spend for the first half of the year. This compares with 5 transactions in excess of €100 million being completed during the entire year in 2017.
There are several sizeable assets being marketed both on and off market at present which will boost transactional activity further in the third and fourth quarters of 2018. Some further Asian investment is expected to materialise in the second half of the year.
CBRE envisage a further shift in the sectoral split of investment spend over the coming months with an increasing proportion of investors seeking ‘alternative’ investment opportunities.
The property consultants say PRS/Build to Rent continues to evolve as a mainstream sector of the Irish investment market in its own right. Indeed, according to CBRE, the volume of capital chasing residential investment opportunities in Ireland’s main cities continues to escalate with several investors who heretofore focussed primarily on traditional investment sectors such as offices and retail now also willing to consider investment opportunities in the residential sector.
To some degree, CBRE say this is a diversification play on a sector that is generally less susceptible to cyclical patterns, but investors are also attracted by the attractive yield profile and rental growth prospects in an Irish context. According to CBRE, most of the capital targeting the PRS/Build to Rent sector in the Irish market is looking to invest over a long-time horizon.
Commenting on the figures, Fiona Kennedy from the Capital Markets team at CBRE Ireland said, "Investors from a range of jurisdictions continue to be attracted to real estate investment opportunities in the Irish market, attracted by buoyant economic fundamentals and the relative strength of occupier market activity as well as comparatively attractive pricing considering yields prevailing in other jurisdictions at present."