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Published in Commercial Property on 04/07/2019

Investment Activity to Set New Records in 2019


CNI Editor reports

INVESTMENT deals gathered pace during the second quarter of the year, with €1.2bn worth of investment properties changing hands, bringing total investment volumes for the first half of the year to €1.8bn.

With a strong pipeline of deals including the Green Reit and Starwood holdings, as well as continued demand for office and residential investments, John Ring, head of research at Knight Frank says: “It’s looking like 2019 investment volumes will surpass the previous record of €4.5bn set in 2014.”

He also points out that residential investment accounted for 45pc of investment spend in the latest period.

Offices also traded well, accounting for 23pc and mixed-use schemes, which include residential and offices, accounted for a further 19pc.

The largest deal in the second quarter saw IRES Reit buy the XVI Portfolio from Marathon for €285m. The portfolio comprises 815 apartments, of which Marathon acquired 588 in 2015 from Nama as part of Project Plum for €120m. With a current annual rent roll of €14.7m, the price reflects a net initial yield of 4pc.

In the second biggest deal, Marathon also sold its stake in the Heuston South Quarter scheme to Chartered Land and Henderson Park Capital for €220m, delivering a premium of 85pc on the €120m paid by Marathon in 2014.

The sale comprised 266 apartments, 106,319 sq ft of office space, 48,034 sq ft of commercial space and 3.6 acres of development land which has the potential to accommodate 245 apartments, as well as retail and office space.

Mr Ring says overseas investors were also active, as seen with LRC Group’s purchase of Project Turner which comprised 600 residential and commercial assets across Dublin, Cork and Galway for €150m. The vendor was Oaktree’s associate Targeted Investment Opportunities.

Deutsche Bank subsidiary DWS paid the Cosgrave Group €108m to acquire 214 apartments at The Fairways in Dún Laoghaire, which is due to be delivered by next February.

“This diversity was also evident in the office market, where both the Lennox Building and Ballast House were purchased by European buyers,” he adds. Developed by Paddy McKillen Jnr, Lennox was purchased by Swiss Life for about €27m, or a 4.8pc NIY. Ballast House was sold to Union Investments for €26.9m, with the deal representing an NIY of 5.62pc.

The largest office deal saw 11 office buildings, development sites and car parks at the Citywest Business Park bought by Bartra Capital and UK group Henley for €105m. Bartra also purchased five office buildings extending to 120,000 sq ft at Cork Airport Business Park for €21.3m.

REF: Irish Independent