The volume of development lands sold in Ireland increased “significantly” between April and June after a “subdued” start to 2022, Savills Ireland has said.
In a new report, the property dealer said that 25 assets worth a total of €193 million changed hands in the second quarter of the year, bringing half-year development land volumes to €275 million.
Two deals worth over €110 million topped the quarter, representing 58 per cent of market turnover. They were Glenveagh’s sale of 5.2 acres at East Road in Dublin’s docklands to Eagle Street for over €60 million and Iput’s Real Estate’s acquisition of 118 acres at Killamonan Business Park in north Dublin for over €50 million.
“By way of contrast,” Savills said in the report, “the previous quarter’s two largest deals were Molyneux House — which sold for €20 million — and Beech Hill, Clonskeagh, which sold for a price in excess of its €13.5 million guide.”
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While overall land sale volumes were 11 per cent lower than average previous half-year figures, Savills said it was the best first six months of a year since 2019 before the pandemic struck. The second quarter of the year also painted a “brighter picture”, with transactional activity 33 per cent above average previous second-quarter volumes.
“While the development land market is facing challenges surrounding rising interest rates and viability issues, there is some positive sentiment that construction cost inflation will soon ease. However, only time will tell,” said John Swarbrigg, director of development land at Savills Ireland
“A strong pool of buyers are active in the market and demand continues, particularly for good quality, well-located sites.”
A report by the property dealer last week noted that commercial real estate transactions hit €3.2 billion in the first six months of the year, a new record and 17 per cent higher than during the first half of 2021.
However, Savills warned that US interest rate hikes and the prospect of the EU following suit this month are making investors warier of doing deals with borrowing costs set to rise for both investors and developers.
