Investment in the Irish property market of 5.5 billion euros in 2021, according to Savills

More than €2 billion was invested in the Irish property market in the last quarter of 2021, bringing the total for the year to €5.5 billion, according to figures from estate agent Savills Ireland.

This compares to an investment of 3 billion euros in 2020 and is the second highest level on record, he said, citing “increasing clarity” on the pandemic and beneficial economic and monetary conditions.

The largest transaction was Blackstone’s acquisition of the Serpentine consortium’s stake in Meta’s new European campus in Ballsbridge, Dublin, for 395 million euros, while KPMG’s pre-letting of 290,000 square feet in the fourth quarter in Hibernian Reit’s Harcourt Square development, expected in 2026, was the year’s largest office lease transaction.

“Investor appetite has been exceptionally strong throughout the year in most real estate sectors. The last quarter of 2021 was characterized by multiple large transactions in the office and industrial sectors in particular, accounting for 36% and 27% of quarterly volumes respectively,” said Kevin McMahon, Divisional Director of Investments at Savills Ireland.

US private equity giant Blackstone’s acquisition, which involved four buildings at the new Meta (formerly known as Facebook) campus, followed strong bidding from multiple parties, Savills said.

The transaction highlighted “the depth of capital and the confidence of international investors in the office market” despite the pandemic-triggered uncertainty over future working practices, he added.

“The office rental market boils down to a year in two halves. After a largely inactive first half of 2021, the office market has finally come back to life in the last two quarters, with significant lettings activity,” said Shane Duffy, office director at Savills Ireland.

‘Floating’ 2022

The agency predicted that 2022 would likely see a “vibrant” office market with workers returning, while the retail sector would also likely record a “more positive” year.

The last quarter of 2021 was marked by strong transactions in the retail sector with 13 asset swaps, the largest of which was the Park Collection, a portfolio of prime retail parks sold to Marlet Property Group by Marathon Asset Management for 74 million euros.

Retail parks have performed well during the pandemic, driven by steady demand for electrical products, furniture, food and household items, Savills noted.

In 2021, the industrial sector’s share of investment volumes continued to grow, he added, accounting for 18% of the market. The sector vacancy rate in Dublin has remained at a historic low of around 1% throughout 2021.

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Penny D. Jackson