CBRE Ireland has released its Ireland Investment & Funding Report Q3 2024, which confirms that almost €600 million was invested into Irish commercial property in the last quarter, bringing total investment volumes for the year-to-date to €1.3bn. Notably, this is the highest level of quarterly spend in the Irish market since Q1 2023. This rebound in the level of spend is the result of several factors, including a narrowing of the bid-ask spread, ECB base interest rate cuts and an increase in receivership sales.
The largest transaction in Q3 and in the year-to-date was the sale of the Square Shopping Centre in Tallaght, which sold for approx. €130m to Eagle Street. For the third consecutive sector, retail was the most invested sector in the Irish market, accounting for 34% of spend in the year to date. The sector is expected to be the most invested sector annually for the first time since 2016.
Among other major deals in Q3 was the sale and leaseback of Primeline Group’s warehousing units in Ashbourne, Co. Meath. The warehousing units were acquired by Deka Immobilien for approx. €70m, and notably the transaction represents Deka’s first logistics acquisition in the Irish market.
Investment into the residential sector remains constrained, with just €256m of capital deployed into the sector in the year-to-date. Between 2018 and 2022, an average of nearly €2bn was deployed into the sector annually. Investors continue to cite rent control as the primary factor stymieing investment. Despite the slowdown in direct investment in the residential sector, recent refinancing processes involving institutionally owned private rental apartment assets in Dublin have attracted a wide array of lenders and very competitive terms. Financiers across Europe continue to view the residential sector favourably because of the strong occupational fundamentals in many European capital cities, including Dublin.
According to head of research at CBRE Ireland, Colin Richardson, “There is a notable uptick in transactional activity in the Irish investment market, driven partly by the downward trajectory of interest rates and thus the wider spread between CRE yields and the cost of debt. There are a number of large-scale transactions ongoing at present which, should they close in the next three months, will push full-year investment volumes to above the level of 2023 spend”.