Irish investment activity has increased 95% during the first three quarters of 2010 compared to the same period in 2009 according to international real estate advisor Savills.
Irish investment activity has increased 95% during the first three quarters of 2010 compared to the same period in 2009 according to international real estate advisor Savills.
The firm states in its latest Irish investment report that turnover from January to the end of Q310 is expected to total €243 million against €140 million the previous year.
Fergus O’Farrell, investment director at Savills, comments: “Investment activity so far in 2010 has been considerably stronger than 2009 with increased appetite from private, domestic investors dominating demand for smaller lot sizes. International buyers have also been attracted by the potential high returns available at all price levels. The profile of investors interested in the Irish market includes institutional investors, property companies, opportunity funds and private investors from the UK, Germany, the US and the Middle Eastâ€.
Sector specific analysis shows that transactions in Q310 were dominated by the retail industry accounting for seven of the 12 transactions completed. In addition, Savills confirms that the first industrial deals recorded since Q409 also took place in Q310 with two confidential transactions totalling circa €12 million.
Savills research notes that there continues to be a supply/demand imbalance with supply currently at its lowest level since 2005. The lack of new properties coming onto the open market fell by 23% in Q310 with €181 million currently available compared to €242 million in Q210. Joan Henry, Savills head of research in Ireland, says: “Virtually all of the current supply is comprised of non prime assets for which there is very little demand. We do however expect to see an increase in supply before the end of the year as vendors start to position themselves for potential disposals with likely sources including NAMA and the banking sector.â€
When analysing yields, Savills found that prime office and retail yields have stabilised since Q209 with retail yields in particular hardening to 6-6.25% following several transactions on Grafton Street in Dublin.