Irish property investment market tops €3bn in H1 | Property news in Ireland

Ireland’s property investment market saw strong activity in the second quarter of 2022, according to Savills Ireland, with deals totaling over €2.3 billion, taking the half-year total to a record €3.2 billion. euros.

The first-half total is 17% higher than 2021 and 11% higher than the previous record for the first half of 2016.

The largest transaction of the quarter was the sale of Hibernia REIT to Brookfield Asset Management for 1.1 billion euros.

After taking the sale into account, total transactions amounted to €1.2bn in Q2 and €2.1bn in the first half.

This half-year total is still 26% higher than the average for the first half of the last five years.

Other significant transactions include three PRS transactions and one CBD office transaction, which range in price from €97.5 million to €122 million.

Market sentiment has now started to soften in some sub-sectors among some investors as US Fed interest rate hikes and confirmation of ECB hikes have shaken investor confidence.

The greatest impact will be felt by buyers who rely heavily on leverage to complete, and could also impact development opportunities and funds which are already impacted by construction cost inflation.

Despite the rapidly changing global financial environment, Savills said the Irish macro-economy and the commercial property sector remain in a relatively favorable position.

Brendan Delaney, Division Director, Investments at Savills Ireland, said: “Investor sentiment has been affected by the volatility and uncertainty in the global macro environment.

“However, the Irish commercial property market continues to experience high interest and transaction values. The gap between property yields and the risk-free rate has narrowed in the first half of the year. Ireland’s attractive yield between itself and other European property markets provides a relative cushion against the impact of higher borrowing costs and higher yields offered by the bond market.

“This quarter, removing the big REIT sale, we saw strong interest in the multifamily and office sectors, accounting for 35% and 22% of deal volumes, respectively. strong demand from US investors across all sectors and Ireland-based investors taking an increasing share of investment volumes.”