Irish Investment Market Q3 2020

Kevin Donohue • 29/10/2020

Unsurprisingly, the on-going effect of COVID-19 on the Irish commercial property market has slowed investment activity relative to previous periods.

However, despite such fallouts, Irish commercial property assets recorded turnover of €251m in direct investment sales in Q3. Against the backdrop of uncertainty, the solid investor demand also saw a number of forward commit transactions take place, which when combined brings the sum to €680m in the three-month period.

In the 9 months to September, direct investment sales totalled €1.15bn across 64 transactions, representing a significant decline on the same period in 2019 where €2.4bn was recorded. A sectoral analysis of the Irish investment market from January to September 2020 reveals office assets attracted the highest share of investor interest, 69%. Followed by residential assets accounting for 11% of turnover.

Dublin trumped regional Ireland in terms of investor interest capturing 97% worth of total turnover in the year to date. Furthermore, appetite from international investors remains strong with overseas capital accounting for €892m of total spend turnover, with international investors particularly active in the higher end of the market.

The most significant deal in terms of value in the quarter was the sale of the Dublin office asset located at 2 Burlington Road, acquired by KGAL for €94m.

As the impact of COVID-19 continues to unfold, investment in Irish commercial assets remains resilient at present. While quarter two saw transactions put on hold or delayed, the most recent quarter has witnessed investors’ focus on a flight to quality with transaction activity driven by a strong appetite for prime office assets, particularly those in core locations.

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