Irish commercial property investment in 2014 was 25% above the peak bubble year of 2006 - a crazy year when residential house builds rose to 93,000 and the main banks began selling property assets to fuel lending - part of AIB's Bank Centre headquarters was sold to Seán Dunne, the cash-strapped developer.
According to Jones Lang LaSalle (JLL), a total of €1.55bn was invested in Irish real estate in Q4 2014 which was the strongest quarter this year. Total year-end volumes are €4.54bn which is a 25% increase on the previous peak in 2006 (€3.63bn).
In total, there have been 295 transactions in the last 12 months, compared to 145 in 2013 and 121 in 2006. There were 15 transactions greater than €100m in 2014 compared to 3 in 2013. The largest transaction of the year was Project Sapphire which Cosgraves sold to Green REIT for €375m in Q2. It comprised two office blocks: George’s Quay and George’s Court, and retail: Westend Retail Park
Hannah Dwyer, head of research at JLL Dublin, said: “2014 has been a very active year for the property market. At this point last year no one predicted the strength and pace of the recovery which we have seen in the last 12 months. The turn-around for investments has been remarkable, with an uplift in the supply of assets coming onto the market, strong demand from investors, and increases in values and returns. Essentially we have seen a pent-up surge of workout activity with willing sellers and buyers in the market”.
2015 is likely to be another strong year for the Irish investment market. Dwyer added: “We do not expect activity to be at the same record-levels we saw in 2014, but investment volumes are likely to achieve €3bn. This is still significantly ahead of the 10-year average of €1.4bn.”
There remains a significant volume of assets still to be brought to the market from banks deleveraging. Although these are across a mix of locations, sectors and quality, there are still opportunities to purchase assets with strong returns and future growth potential."
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