Irish commercial property deals slump to a ten year low of less than €1.8bn

Irish commercial property deals slump to a ten year low of less than €1.8bn




Annual average sales have run at €4.3bn over the 10 years up to the end of 2022.

Consequently preliminary full year figures to date total only €1.76bn which is lowest level of deals in 10 years and 59pc below the annual average of €4.3bn seen over the 10 years up to the end of 2022.

However agents are still working to get deals over the line so the full year figure could yet exceed the €2 bn if those deals are completed.

The biggest deal recorded in the fourth quarter saw Pontegadea, the family firm of Zara founder Amancio Ortega, pay €225m for a major logistics investment located at Baldonnell Business Park, just off the M7 in south west Dublin.

This deal is recognised as the largest and most valuable logistics deal ever to have taken place in the Irish market and reflects how demand for industrial is holding up well in the face of economic headwinds.

Fully let, the property extends to 1.2 m sq ft of which 630,000sq ft is occupied by online retailer Amazon as the company’s e-fulfilment centre and this building is also considered the largest single “build-to-suit” pre-let warehouse ever in the Irish market.

Pontegadea availed of the opportunity presented by a softening in the value of Irish investment property this year as even the most sought after industrial and logistics sector saw values fall by an estimated 6pc over the 12 months to the end of September.

Consequently yields for prime industrials moved out from 4 to 5pc.

The Mountpark deal equated to a net initial yield of 4.85pc which is considered to reflect a fairly healthy price for the investment in the light of the market’s decline.

Then again this was probably helped by the scarcity of choice in the prime industrial investment market.

Earlier in the year Pontegadea bought 120 rental apartments at Opus at Six Hanover Quay in Dublin’s south docklands for €100m.

Cushman & Wakefield acted for Pontegadea on the transaction while CBRE represented Mountpark.

Also in west Dublin another of the top three industrial deals of the quarter saw a data centre at CityWest sell for €20.6m but the details have not been disclosed.

The second biggest deal saw a Cork retail property sell for €21.5m but no further details are available on that deal which also reflects continuing demand for regional retail properties.

Earlier in the year a number of provincial shopping centres changed hands most notably the Hexagon portfolio, a collection of six shopping centres in Dublin, Donegal, Galway, Laois, Limerick and Louth, formerly part of Pat Doherty’s Harcourt Developments.

Initially put on the market for €100 m, it was bought by a fund managed by Davy Real Estate for €74m.

Davy also paid €29 m for Marshes shopping centre in Dundalk, about €15 m less than the vendor, Kennedy Wilson, paid for the shopping centre in 2014.


Source link