Irish investors take Europe by storm with €4.8bn slice of property market

IRISH investors ploughed €4.8 billion into European properties last year, becoming the third biggest force in cross-border property investment after the Germans and Americans.

Auctioneers CB Richard Ellis Gunne’s latest research into European investment property trends found direct investment markets in the 15 EU countries in 2004 reached a record 103.6bn. This represented a 26% increase on the value of transactions in 2003.

Director of research at CB Richard Ellis Gunne, Marie Hunt, said that in 2004 Irish investors acquired around €4.8bn of property in the EU.

“An extraordinary percentage of this was outside Ireland, where the Irish bought some €3.9bn of property. This made them the third largest cross-border purchaser in 2004, after the Germans and Americans,” she said.

Ms Hunt said over the last few years Irish investors have grown significantly in their importance in the European investment market.

“The very strong economic growth in Ireland in recent years means that there is a lot of wealth in the country and the domestic real estate market is not big enough to absorb the demand for real estate,” she explained. While a large proportion of Irish acquisitions were in Britain it has become evident that Irish investors are looking further afield.

“There were acquisitions in Belgium, France and the Netherlands in 2004 as well as in Central and Eastern Europe. This is a trend that is expected to continue into 2005 and many more acquisitions outside Ireland and Britain can be expected,” she said.

Irish investors are showing a strong preference for office properties which made up two thirds of acquisitions in 2004.

“This is substantially higher than the 48% that offices represent of the entire EU-15 market. However, this bias towards offices is typical of cross-border investors, even if it is more pronounced for Irish investors.

“Secondly, there is a noticeable difference in the lot size profile. The average deal size was €36.7 million, which compares to €48m for cross-border investors generally. The main reason for this seems to be that Irish investors were not involved in the very largest deals in the EU-15 last year. Lot sizes in excess of €500m accounted for 16% of investment turnover in 2004, whereas the largest acquisition by an Irish investor was just over €250m,” she said.