‘Mega deals’ drive bumper year for Irish property market

More than €3.6 billion was invested in the Irish property market last year, according to data from BNP Paribas Real Estate Ireland, with the Dublin office market putting in its best year on record.

It was the fourth-strongest year on record in terms of investment spend in Ireland, the company said, with 11 so-called “mega deals” worth more than €100 million

Some 372,441sq m of office space was taken up in Dublin last year, a 5.1 per cent rise on 2017. The largest single transaction was the sale of Heuston South Quarter to an investor in the Far East, with a €175 million price tag.

"Irish property maintained its strong performance of recent years, with no slowdown in demand, and 'mega deals' remained a dominant trend, highlighting confidence in the market particularly from international investors," Kenneth Rouse, managing director and head of investment at BNP Paribas Real Estate Ireland, said.

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In the office sector, €1.5 billion was invested across 79 deals, some 42 per cent of total turnover. Out of the top 10 transactions, five were offices.

Residential investments

In the private rented sector (PRS), investment accelerated during the year with €1.1 billion invested in 37 deals. Residential investments accounted for 31 per cent of total turnover for the year, rising from 15 per cent in 2017.

The fifth-largest transaction overall was the sale of 372 apartments in Clongriffin, Dublin 13– they were bought by Tristan Capital Partners for €140 million.

Meanwhile, Facebook's pre-let of more than 80,000sq m at the former AIB Bankcentre in Ballsbridge accounted for 22 per cent of take-up last year, and was the largest office deal in the State's history.

Shared workspace firm WeWork took 31,905sq m in four different locations, bringing its total space to 41,821sq m. There is the potential for more, with two further deals believed to be in progress.

"Technology, media, and telecom businesses like Facebook and Google accounted for 50 per cent of total office take-up in Dublin in 2018, and there is no sign of a slowdown in demand, with the market likely to be dominated by expanding occupiers, looking for additional space again this year," Mr Rouse said.

One Molesworth Street in Dublin 2 was the highest rent achieved in Dublin city, at €753 per sq m, with Three Dublin Airport Central taking the title for the suburbs at €355 per sq m.