Commercial property specialists CBRE have announced that yields for prime Build-to-Rent property investments in the Dublin market have now hardened to a new level of 3.85% as a result of strong investor appetite for this emerging asset class.
This compares with 4.0% for prime office properties and 5.1% for prime industrial assets at present. The Build-to-Rent sector has now become a mainstream investment sector of the Irish market in its own right, having accounted for 30% of investment in Ireland during 2018, up from only 4% in 2015.
As further transactions complete over the coming months and set new transactional evidence, CBRE expect prime yields in this sector to compress further. The property specialists beleive the growth of the Build-to-Rent sector in Ireland has been phenomenal with more than €1.167 billion deployed in 2018 compared to just over €70 million when multifamily investment first materialised in the Irish market in 2012.
Commenting on the research, Executive Director & Head of Research at CBRE, Marie Hunt said, "In fact, investment in this sector is only compromised by a shortage of investible stock such is volume of capital looking to deploy. Interestingly, an increasing proportion of investors seeking to invest in the Build-to-Rent sector in the Irish market are now willing to look beyond core city centre opportunities and are focussing attention on good suburban locations on key transport nodes where viability and affordability are considerably better."