High inflation and rising interest rates hit market for development land

Lisney report finds €86m in sales recorded in greater Dublin area in first half of 2023 compared to €279m in first half of 2022

The level of activity in the development land market saw a significant decline in the first half of 2023, with just 26 sites with combined selling prices of €86 million sold in the greater Dublin area compared to total sales of €279 million and €244 million respectively in the first and second halves of 2022. That is the key finding from the latest development land update from Lisney Commercial Real Estate.

While the low sales volumes can be attributed to elevated inflation and rising interest rates, Lisney notes the additional drag on activity arising from discrepancies between national and local planning policy, along with the chilling effect of judicial reviews on approved planning applications. Commenting on this, the report’s authors say: “Developers are taking a cautious approach and adapting their strategies to effectively navigate the evolving market dynamics. For example, many only have demand for sites with full planning permission that are ready-to-go, and which are economically viable.”

Dublin accounted for 77 per cent of total turnover in the development land market in the first half of this year, with a further 10 per cent in Co Kildare, 8 per cent in Co Meath and 5 per cent in Co Wicklow.

Out of the 26 sites sold in the first six months, 12 had planning permission, making up 7 per cent of the total land sold by size (by acres) and 54 per cent of the €86 million in total turnover.


The average deal size of development sites sold in the first half was €3.4 million, representing a significant decrease on the €6.58 million average deal size in the second half of 2022 and the €7.33 million average in the first half of 2022. Notably, only two deals in the first half of 2023 had values in excess of €10 million and these accounted for 27.3 per cent of the total turnover for the period.

In terms of transactions the largest deal was the €13 million off-market sale of five acres with planning permission for a 428-unit private rented sector (PRS) scheme in south Dublin (€2.6 million per acre). The second largest deal was the sale in Co Dublin of the former Italian ambassador’s residence, Lucan House, on 30 acres for about €10 million (€333,300 per acre) and adjoining lands known as Coldblow (60 acres) for €4.8 million (€80,000 per acre). With this acquisition South Dublin County Council plans to extend St Catherine’s Park.

A 0.83-acre site at North King Street in Dublin city centre was sold for €7.35 million (€8.85m per acre). The site had been guiding at €8 million as part of the Dublin 7 Portfolio, along with a mixed-use property on nearby Phibsborough Road, which had been guiding at €4 million. The North King Street site offers a redevelopment opportunity and currently has tenants in existing buildings.

Other notable deals included the sale of a 3.16-acre site with planning permission for 79 residential units in Cabinteely, Dublin 18, for €6.1 million (€1.9m per acre), and the sale of a 0.6-acre site at Brookfield Road in Dublin 8 for €6 million (€9.7m per acre). The remaining sales for the first half of the year ranged in value between €205,000 and €5.9 million.

Despite these low levels of activity Lisney reports that more than €170 million worth of land was sale-agreed in the greater Dublin area (GDA) at the end of June 2023. Over 70 per cent of this was in Dublin, with the remainder spread across Co Wicklow and Co Meath. The report’s authors believe that the overall value of sale-agreed land for the period is likely to be higher, noting that about one-third of activity has been taking place off-market in recent times.

While just 20 sites with combined asking prices of €220 million were available for sale in the greater Dublin area at the end of June, Lisney expects this number to climb in the coming months as investors and developers come under pressure. Receiverships and forced sales by funders will be a feature of the market while others will be selling due to higher development costs and challenges in progressing with building works, Lisney says. Developers that acquired sites using secondary funding in the last 36 months may also now need to refinance, which might also contribute to the supply, the report adds. As more planning applications progress through the system, it is expected that a greater number of ready-to-go sites will come for sale.

Ronald Quinlan

Ronald Quinlan

Ronald Quinlan is Property Editor of The Irish Times