According to the latest research by international real estate advisor Savills, investment turnover in Ireland in the first half of 2013 reached approximately €610 million beating the 2012 year total volume of €576 million.  This represents a more than three-fold increase compared with the same period in 2012, when the investment volume reached €170 million.  The firm suggests this marked increase in turnover is evidence of renewed investor confidence in the Irish market and strong demand from foreign buyers, particularly from the US, Germany, the UK, Israel and Australia.

The market analysis highlights that in this period Irish funds and private Irish investors accounted of 51% of turnover (€312 million), followed by American buyers, who acquired €161 million making up 27% of market share.  European investors accounted for 13% of market share, acquiring €81 million in this time period.

In terms of asset classes, Savills notes that the majority of demand was represented by office transactions, with 48% of turnover in the first half of the year in this sector.  The firm believes that investors are seeking well-located, third generation offices, where prime rents are expected to increase in the next few years due to a shortage of new office developments in the planning pipeline. In addition, the real estate advisor highlights an increasing investor demand for apartment block sales, particularly where there is 100% ownership of the entire block. Multi-family deals completed in H1, which included the sale of Clancy Quay for approximately €80 million, amounting to a total of €105 million.

Domhnaill O’ Sullivan, investment director at Savills Ireland, comments: “Turnover for the first half of 2013 exceeded that of the entire 2012, and the outlook for the remainder of the year remains extremely positive.  We foresee that with approximately €75 million of investment property sales already agreed, a further €320 million of stock currently available and an additional €450 million of assets expected to come on the market in Q3, we maintain our forecast that turnover will exceed the €1 billion mark by year end, a level which has not been reached since the highs of 2007.

“Nonetheless, supply continues to be a problem in a market with no shortage of well capitalised buyers. Due to the level of competitive tension that exists at present, we forecast yield compression in the office and multi-family sectors whilst the second half of the year will also see an increase in the volume of retail investments coming to the market.”

Savills records over 50 completed investment transactions in H1 2013. Top deals include the sale of Clancy Quay, a prime multi-family asset in Dublin 8 to Kennedy Wilson for in the region of €80 million providing a net initial yield of approximately 6.5%; the sale of The Gemini Portfolio, comprising three multi-family assets located in Dublin and Cork to the Comer Group for approximately €65 million; the sale of Bishop’s Square offices in Dublin 2 to King Street, a US investor, for €65 million; the purchase by German fund GLL of 102-104 Grafton Street, which is occupied by River Island and Wallis, for €40 million; the sale of La Touche House, a prime office investment located in the IFSC to Credit Suisse for a price of €35 million and the sale of the Harcourt Building to Davy Target Investments for a price of €31.5 million.