CBRE Ireland has today released figures for the volume and value of development land traded (both on and off-market) in the Irish market in the first half of 2018, which shows that 66 transactions totalling almost exactly €400 million signed in the six months to the end of June. This compares to 50 development land transactions totalling almost €269 million completed in the first half of 2017.
Irish Development Land Spend 2009 – 2018 H1 Source: CBRE
Activity has been brisk in the development land sector of the market over recent months with strong demand prevailing from both domestic and international bidders according to Peter Garrigan, Director in the Development Land team.
“Very little of scale was offered for sale in the development land market in the opening months of the year but there has been a notable increase in the volume of stock (including some sizeable land parcels) coming to the market in recent months. This is welcome considering the supply shortages inherent in many sectors at present, most notably in the housing sector. An increase in the volume of stock being offered for sale will give a welcome boost to transactional activity in the development sector in the second half of the year, with 2018 land sales in Ireland now expected to surpass last year’s volume of approximately €750 million”.
There has been increased appetite for residential sites of late, helped to some degree by the release earlier this year of revised apartment guidelines, which have provided bidders with more clarity and certainty from a pricing and viability perspective. Planning activity has also increased, with planning permissions up 81% year-on-year in Q1 2018 and a particularly notable increase in applications for apartments.
The market is now eagerly awaiting the Minister for Housing’s direction on height and density (expected later this month), which will provide further clarity in pricing development sites. In addition to providing residential units for sale, several bidders are now pricing sites on the basis of providing purpose-built Build to Rent (BTR) stock, purpose-built student accommodation (PBSA) and/or co-living accommodation.