The opening three months of the year have returned €933m in turnover for the Irish investment market. Investment volumes were boosted significantly by three transactions above €100m, which when combined, accounted for over 50% of the total figure.
New research from Cushman & Wakefield shows that compared to the comparable period in 2017, turnover saw a twofold increase, rising from €469.4m. However, in terms of the volume of deals completing, performance remained almost aligned, with 51 deals compared to 53 in the first quarter 2017.
The largest transaction of the quarter was the off-market sale of Heuston South Quarter, Dublin 8. The large office asset was acquired for approximately €175m by an unnamed investor, making it one of the largest single asset office transactions over the past number of years. Other transactions of note include No. 1, Dublin Landings and Chatham & King. No. 1 Dublin Landings, was acquired by Triuva, a German investment management fund, for €164m providing an initial yield of 3.94%.
The ten storey office block completed construction in the fourth quarter 2017, and has recently been occupied by NTMA who had pre-let the building. Chatham & King is a mixed-used retail, office and residential investment, which also included a forward fund element. The asset was purchased off-market for €155m by US company, Hines.
In terms of location, Dublin saw the largest proportion of capital inflow. However, following regional investment reaching its peak level in 2017 of the past five years, this uplift appears to have carried through into the opening months of 2018.
Investment in Cork, Limerick and Galway totalled €190m across 10 deals. This total is inflated by The Elysian in Cork, however, other deals of note included a student accommodation block in Galway, Cuirt na Coiribe, acquired for €35m, and the Plassey Portfolio, Limerick, for €25m.
According to the figures, the Irish investment market continues to attract interest from both overseas and domestic investors. Capital from overseas was particularly active at the top end of the market, with investment managers from the US and Europe building on their Irish portfolios. In total, foreign investment accounted for 70% of turnover, with private domestic investors focusing largely on the €1-€10m price bracket.
In terms of sector, the office market has retained its post as the most dominant sector, with robust occupier activity continuing to prove attractive for investors. Absorbing €511.8m, offices accounted for 55% of investment turnover.
This total sum was once again driven by the two big ticket items previously mentioned, however with strong occupier activity continuing in the market, a further €172.8m transacted across 18 deals.
Commenting on the quarter, Chief Economist at Cushman & Wakefield, Marian Finnegan said, "The strength of investment in the Irish market during the opening quarter reflects the positive view of the country’s successful economic performance. Ireland retained its position as the fastest growing economy in the EU in 2017 and short-term forecasts depict further expansion over the coming years. These positive indicators have led to strengthening investor demand both in new asset classes such as PRS, and locations outside Dublin."
Source: www.businessworld.ie
