Sherry FitzGerald, the housing agent, reported that the third quarter investment in the Irish property market saw a 26% increase in transaction amounts compared to the corresponding quarter last year, accumulating to a total of €591 million.
Almost one-third of this figure, nearly €196 million, originated from the retail sector, making it the main contributor to the investment during the third quarter. This was chiefly due to the approximate €130 million sale of The Square shopping centre in Tallaght to the property investment companies, Eagle Street Partners and Arrow.
However, the third quarter saw a decrease in the number of transactions, closing at only 24 compared to 34 sales in the second quarter. The latter’s transactions amounted to a total of €523 million.
Sherry FitzGerald’s report analised the market, stating it was in the initial phase of recovery and that the overall activity was still beneath the average. According to Jean Behan, the senior economist and research head, improvements in global interest rates and favourable asset pricing have played a positive role in the recovery of the investment market. She also predicted that the prospective interest rate cuts in the near future contribute to a favourable situation.
The increase in the amount of large-scale transactions, particularly where 13 per cent of property sales were valued at €50 million or higher, was attributed to the third quarter’s transaction figure.
In addition to The Square’s sale, student accommodation located on Dublin’s Stephen’s Street was also sold to Hines for an estimated €80 million in September. The 299-room building will be rebranded as Aparto Dublin Stephen’s Quarter.
Furthermore, the year’s third quarter also marked the highest amount spent on office spaces within a year, contributing to 10 assets on the market.
In the initial three quarters, investment in the Irish market amounted to nearly €1.3 billion, a decrease of 13 per cent compared to the same period in 2023, due to a sluggish start to the year.
Ross Harris, Sherry FitzGerald’s Residential and Commercial Investment Director, recognised the recent uplift in investment activity, however, he expressed that the same advancement has not been mirrored in the Irish letting sector. Despite signs of improvement, weighing issues of viability and unsupportive governmental policies have essentially dampened any progress in the private letting sector.
Sherry FitzGerald made discourses previously, towards the end of the previous year, indicating that the Irish commercial investment activity was “at the lowest annual turnover levels observed in the past ten years, barely exceeding €2 billion”.
The forward-looking discussions for 2023 suggest an apprehensive recovery in the investment market as investor’s trust is regained.