Ireland has completed its best year on record for commercial property deals, with almost €4bn (£3.1bn) worth of transactions completed during 2014.
Supported by an additional €17bn (£13.3bn) worth of commercial property-backed loans and €8bn (£6.2bn) spent on the residential sector there is overwhelming evidence that “the Irish market has turned” claims real estate solutions company DTZ Sherry FitzGerald.
In its annual report, the company’s director of investments, Kevin Donohue, reflects that “2014 was an incredibly buoyant year for Irish property investments and early indications are very positive for 2015”.
Adding that: “While the office market has dominated the recovery we are increasingly optimistic that 2015 will be the year for the retail sector … This sector was worst hit by the downturn with capital values down 72 per cent from peak.”
The report says that despite predictions the investment sales market could top €5bn (£3.9bn), the loan sales and investment returns far exceeded any previous year — including the best months of the Irish property boom.
“Deal sizes remain unusually large, as properties that had fallen into receivership are worked out by National Asset Management Agency (NAMA) and the banks,” it adds.
While the majority of transactions fell in to the mixed-use category such as Project Sapphire — which was the largest deal of the year and included offices and a retail park — both the office and retail sectors individually performed well, said DTZ.
Project Sapphire was a portfolio of properties developed by the Cosgrave Property Group, an Irish property development company owned and run by the brothers Joseph, Michael and Peter Cosgrave. When NAMA sold the portfolio it included about 650,000 sq ft of office buildings at Georges Quay and George’s Court, Dublin 2 and retail and other commercial space in Westend Retail Park, Blanchardstown, in West Dublin.
The largest single asset transaction of 2014 was the February sale of Liffey Valley Shopping Centre for €250m (£196m). Its closest rival was the disposal of the Platinum Collection, a portfolio of four office blacks including the Bloodstone Building and Grand Mill Quay in the Dublin docklands was sold by NAMA for €165m (£129m) to a mix of Blackstone and Google.
According to DTZ, the Dublin market dominated the year’s transactions, accounting for €8 (£6.2) of every €10 (£7.8) invested in property. And a quarter of all deals were single office deals, 25 per cent of all transactions.
“The market has now definitely turned,” adds Kevin Donohue, “but there is still capacity for growth during the coming year, particularly in terms of rental values.”
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