Construction BUSINESS

Almost €800m was invested in the Irish property market in the third quarter of this year, which is 25% higher than a typical third quarter, according to the latest data from property advisor, Savills.

This brought total investment volumes in Irish real estate to €3.5 billion so far this year, representing the highest volumes for the period on record.

Savills says conditions in the investment market seem to have returned to relative normalcy as restrictions have been reduced throughout the year.

2020 was defined by two lost quarters with travel restrictions hampering the ability of foreign investors to physically come to Ireland, while in-person viewings also faced serious disruption throughout the year.

Brendan Delaney, Divisional Director of Investments at Savills, said, “We are now seeing a resumption of the strong levels of activity present before the pandemic with several large deals that are close to signing set to drive a strong fourth quarter.

“Based on our analysis we expect to see year-end totals of between €4.75 billion and €5.25 billion in 2021, the second strongest year this cycle,” he said.

He said investor appetite was strong across the board, but the multi-family sector (housing estates and apartments) continues to out-perform the rest of the market with €414m worth of multi-family assets trading which accounted for 52% of investment volumes in the quarter

“In total, multi-family assets with a value of €1.9 billion have traded this year giving the sector a 54% market share,” Mr Delaney said.

The analysis shows that the sector has accounted for a growing share of the investment market in recent years driven by strong growth in the Private Rented Sector market.

Mr Delaney said the sector has been resilient to the pandemic to the point of benefitting from it, due to its growing perception as a defensive asset class.

He said the private rented sector “continues to play a vital role in unlocking new supply, which is evident by the majority of residential units being forward purchased.

“This is providing a healthy investment base by giving certainty for developers, without this, it is highly unlikely that current levels of construction would be happening.”

Separately, Savills is watching the retail sector with great interest.

The sector accounted for €107m this quarter, 14% of the total volume.

This is the first time since Q1 2019 that the sector has accounted for more than 10% of total volumes.

Mr Delaney said several deals that are almost signed would have dramatically shifted this figure.

Source: RTE