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Despite challenges, investment market shows great resilience

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With more than €3 billion in transactions during 2020, PRS and offices were again the most active sectors – but retail remains in flux

The Investment Market showed great resilience in 2020 with over €3bn transacting. A surge in activity in Q4 was expected and it certainly delivered with over €1.25bn of deals signed. Almost 60% of 2020’s investment spend came from European Investors, this in itself shows that there is great International confidence in the Irish Investment Market and that many of these European Investment funds already have local platforms in place. 

 

Going into 2020 Brexit was the leading concern but Covid-19 took front and centre and indeed is set to do so for the short to medium term. When this pandemic, especially the implementation of national and international travel restrictions, is taken into consideration the Investment Market performed exceptionally well.

 

PRS and Office were again the most active sectors, a trend evident for the past number of years, accounting for 80% of all transactions in 2020. The largest PRS deal was the forward sale of 368 apartments in Cheevers Court, Dun Laoghaire in Q3 to DWS for a reported €195m. However, the largest deal of 2020 was achieved in the Industrial sector with GIC’s acquisition of Morgan Stanley’s interest in The Exeter Group portfolio for €200m. This Included over 30 properties in Business Parks such as Greenogue and Baldonnell. The office sector faces many questions, the most pressing being the long-term implications of working from home – the impact is yet to be determined and it is too soon for a short answer. However, even with this level of uncertainty the office market performed well, highlights were the sale of Bishop’s Square for €183m to GLL and 28 Fitzwilliam St to Amundi Immobolier for €177.5m

 

Q4 saw €1.256bn transacting with the majority going to the PRS sector with a market share of 42% (€532.8m) across 12 deals. IRES, ILIM and Round Hill Capital were all active, acquiring three of the top four. There were seven deals across the Office sector with 28 Fitzwilliam Square (Amundi Immobolier) and Baggot Plaza (Deka) accounting for almost 90% of expenditure. Corum were again active with the €21m acquisition of 3009 Lake Drive, Citywest. Retail had a strong finish with over €100m transacting, however, it is still a sector in flux. The most recent sale of Swords Central for 49% below its guide highlights the instability currently being experienced in this sector.   

 

Aoife Murray of Colliers International states “Covid-19 did not dampen activity. In spite of incredibly challenging circumstance, Brexit/ Covid, Irish still outperformed the 10 year average. We have witnessed a confidence in the Irish market, illustrating demand and that Ireland remains an attractive place for international capital” 

 

Outlook 2021 remains optimistic, there is light at the end of the Covid-19 tunnel with a number of vaccines now in circulation however, with travel restrictions looking likely to remain in place and another Level 5 Lockdown we may see more overseas buyers setting up Irish platforms in order to asset manage current stock and to continue investment activity without international travel hindering same. PRS and Office will continue to have market share, there is a lot of capital chasing Industrial & Logistics, however / supply is still an issue and holding the sector back. Social housing will emerge as a standalone sector in 2021, there is demand in the market and will be one to watch. Off market activity is expected to continue to be a feature of the market. 

 

Capital Markets Q4 2020 Dashboard

 

For further information, please contact:

Aoife Murray

Associate Director

Direct +353 1 633 3718 

Mobile +353 3687643

aoife.murray@colliers.com