A total of €1.8bn was spent on Irish commercial property transactions in the third quarter of this year.
That brings total spending year-to-date to €4.9 billion — up nearly 40 percent from the same period in 2021, and total spending for the third quarter is well above the quarterly average of about 1.2, according to CBRE’s Colin Richardson Billion euro.
JLL’s Niall Gargan also notes that the third-quarter deals came at a time of “increasing investor caution due to rising interest rates, mounting inflationary pressures and monetary tightening across the board.”
“The rising cost of borrowing is starting to impact underwriting, yields and returns,” said Mr. Gargan. “During the last quarter of the year there will be a new phase of price discovery that will result in potentially reduced liquidity and bid intensity. ”
Office, residential and alternatives (hotels and healthcare) are the leading sectors for investment with 40 percent, 35 percent and 14 percent of total investment, respectively.
He says the office and residential sectors outperformed their five-year quarterly averages by 70 percent and 44 percent, respectively, in the third quarter.
The largest transaction in the third quarter was Johnny Ronan’s RGRE sale of Salesforce’s corporate headquarters and The Samuel Hotel in Dublin’s North Docklands, which was part of a portfolio purchased from Blackstone for more than €500 million. Other notable office transactions in the third quarter included the sale of the Watermarque office building at Dublin 4 and the Eight Building at Dublin 8.
The second largest deal was the acquisition of four care homes by Belgium’s Reit Aedifica from Bartra Healthcare from Richard Barrett for €161 million.
Surprisingly, given demand, the combined value of industrial and logistics real estate fell 19 percent in the third quarter compared to the quarterly average.
Lisney’s Cathal Daughton says demand for manufactured products is still there, but there are fewer buyers with active needs as many have taken a wait-and-see approach for the next six to 12 months.
In this area, too, sustainability and energy use are increasingly coming into focus, especially in new buildings.
Mr Gargan points out that “fundamentals around the industry remain strong” and rents are hitting a record Top price of €11.75 per square foot for prime space.
https://www.independent.ie/business/commercial-property/investment-deals-reach-49bn-in-first-nine-months-of-the-year-42043838.html Investment deals reach €4.9 billion in the first nine months of the year