Property investment most active since 2007

THE flow of international funds to Irish commercial property has been the standout investment story of 2013. Investment activity this year is expected to exceed €1bn for the first time since 2007.

Investment activity has been boosted by the successful launch of the Green REIT (or Real Estate Investment Trusts), and the expectation of further REIT launches. The Irish commercial market was already popular with several well-known US private equity names as well as the established Irish pension funds

Due to this positive buzz surrounding the market, investors and wealth managers would dare to question; is now the right moment to increase exposure to Irish commercial property and benefit from the upswing? Recovery is slow, but very much recognised, although mainly in Dublin locations.

Values have been stabilising in prime Dublin commercial districts and demand is increasing, particularly where there is a strong tenant covenant and secure income flows. Even riskier, insecure assets in prime locations are of interest to investors.

Investors believe Dublin has the best rental growth prospects compared to other European cities.

Retail rents in prime locations are 50% of what they were during the height of the boom years which has attracted strong interest from existing and new retailers.

Likewise, higher demand in commercial space in Dublin 1, 2 and 4 due to the lack of existing Grade A office space, and the lack of speculative space being built, will also see an increase in rents for space in the short to medium term, leading to a recovery in investment values.

It is still unclear whether investment interest will extend beyond the prime Dublin hot spots to the commercial sectors further afield across the country.

Read More…

Knight Frank

Leave a Reply Text

Your email address will not be published. Required fields are marked *