Robust levels of activity in the Irish commercial property investment market continued in Q1 2022 with €762 million invested across 31 transactions. This represents a decline of 37% relative to Q1 2021 – a factor of a limited supply of core investment opportunities as opposed to low demand.
Residential remains the dominant asset class, accounting for 50% of Q1 turnover. This was largely driven by the sale of the Project Ruby student accommodation portfolio which was the top deal of the quarter. There also has been strong demand for core office investment opportunities which are in short supply. Investors are attracted by a diverse and increasingly international tenant base who are taking up world-class offices both in and outside of Dublin. The delivery of new offices in regional locations is supporting increased tenant demand, evidenced by several significant FDI announcements in Galway and Cork in recent months.
Capital allocations to industrial and logistics are also increasing in Ireland in line with global trends. This sector has been relatively immune to the challenges of the last two years with immensely strong occupier demand and low supply driving rental growth and yield compression. Retail is also seeing increased interest however investors remain selective and performance varies depending on the subsector.
The Irish investment market is becoming increasingly globalised; Ireland continues to be a core market for institutional European and US investors and several new investors have entered the market in recent months. Additionally, core German investors who previously focused on offices are now seeking greater exposure to the PRS and logistics sectors which demonstrates confidence in the long-term trajectory of the Irish economy and property markets.