Development land sales double to reach highest level since crash

Last year saw the highest volume in development land transactions since the economic crash, with land for the residential sector comprising the majority.

Some €1.39 billion worth of land was bought and sold across the greater Dublin area, Cork, Galway and Limerick in 2018, almost double the level seen in 2017 according to data from commercial property agent Cushman & Wakefield.

About €928 million, or 67 per cent of the total volume, was spent on sites primarily to be used for residential purposes. This comes as the Republic’s housing shortage persists amid an appetite for a greater number of homes coming to market.

"In 2018, some of the biggest remaining residential land banks and mixed-use projects under asset management in the Nama portfolio were sold, which resulted in the strongest land sale volumes in the past 10 years," said Donal Kellegher, Cushman & Wakefield's head of development land.

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The majority of transactions took place in greater Dublin, with €1.25 billion sold within the year, representing growth of 96 per cent. The most notable sales were of two docklands sites: City Block 9 and City Block 3 sold for around €180 million and €113 million respectively.

Larger deals

Last year was characterised by larger scale deals, with 20 transactions for €15 million or more. That compares to just eight in 2017.

While Dublin saw the bulk of activity, Cork recorded development land deals worth in excess of €105 million, a 91 per cent jump on the previous year. The sale of the Live at the Marquee site and the Maryborough Ridge sites to Glenveagh properties, for a combined value of about €40 million, were among the most notable deals.

In Galway and Limerick, the year was quite slow with the exception of the fourth quarter, during which around €16 million worth of sales closed across the combined markets.

The market for the best sites and projects remains strong from well-resourced developers and their funders, underpinned by clear residential and commercial end user demand. The private rented residential sector (PRS) is continuing to mature and is proving to be a key driver in the demand and pricing of some development lands,” Mr Kellegher said.