$500 Million Invested in Irish Commercial Properties in Q1
According to JLL, just over $500 million of Irish property has traded in the first 3 months of 2017. Volumes were boosted by a few large transactions, with one deal greater than $106 million. 13-18 City Quay, which was sold by Targeted Investment Opportunities and purchased by Irish Life, was the largest transaction at $134 million. The 110,000 sq. ft office building, which was pre-let last year to Grant Thornton on a 25-year lease is due to start construction imminently, and therefore this sale is a forward funding investment for an office development.
Hannah Dwyer, Head of Research at JLL said, "Like Q1 2016, 2017 has started relatively slowly, with limited supply of new quality product coming to the market in the first 3 months of the year. Although $500 million for Q1 is a steady start to the year, a number of these transactions, particularly the larger ones, are deals that were concluding towards the end of last year.
The largest transaction was the forward funding of an office development that is under construction. There will be further opportunities for access to some larger transactions over the course of the next 12 months via forward funding. As pricing for prime Dublin office buildings has intensified in the last 2 years, forward funding offers investors an opportunity to purchase a Grade A office investment opportunity at slightly lower pricing levels, albeit with slightly more risk.
Demand continues to be steady from both domestic and overseas purchasers, but some are being more selective, depending on the investor type. We are continuing to see new entrants to the market which is positive. The depth of bidding on some transactions, is critically dependent on vendor price aspirations with a noticeable swallowing of demand where the property is regarded as over-priced."