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Irish commercial property market sees an acute slowdown

Written by Robert McHugh, on 9th Jul 2020. Posted in Property

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The latest research from Cushman & Wakefield shows that Ireland’s commercial property market witnessed an acute slowdown in investment activity in quarter two as a direct result of COVID-19.

Total investment turnover reached approximately €378m across sixteen deals in the three-month period from April to June end. At the midpoint juncture of the year, investment into Irish commercial property stood at €902m across fifty-four deals.

Volumes recorded in quarter two reflect a significant decrease on the €1.1bn achieved over the identical period in 2019. However, quarter two 2019 was largely bolstered by four transactions sold in excess of €100m, the aggregate value of these four sales was €780m.

Although volumes were down in the quarter, the market displayed similar trends witnessed historically, with investor appetite favouring the office sector, accounting for 69% of turnover. The largest transaction of the quarter was the acquisition by GLL Real Estate Partners of Bishop’s Square, Dublin 2. The affiliate of the Australian investment bank Macquarie Group and Patrizia AG, GLL Real Estate Partners purchased the office block for €183m.

Cushman & Wakefield’s forecasted yield outlook for the Dublin investment market in 2020 projects a minor outward movement of prime office yields, while a slight inward adjustment is reported for the logistics market. Considering retail has fallen out of favour for most investors, a more pronounced adjustment is projected for prime retail yields, similar to trends across other European markets.

Commenting on the market, Head of Capital Markets Ireland at Cushman & Wakefield Ireland, Kevin Donohue said, "Quarter two illustrated the negative impact the COVID-19 pandemic has had on the investment market, with volumes down considerably. A number of larger transactions were agreed prior to lockdown, however, the fact that these deals still completed during the quarter shows that investor confidence in the Irish Investment market remains resilient. We expect a similar outturn for quarter three due to continuing overseas travel restrictions, but once lifted, we anticipate the market rebounding strongly in quarter four and into 2021."

Source: www.businessworld.ie 

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