Real estate sales hit €4.5bn

Investment in the country’s real estate market reached record levels last year with a number of new players coming to the fore accounting for much the activity. More than €4.5bn was spent on real estate in 2014 making it the highest amount ever invested in the Irish market surpassing the previous peak by more than €900m.

The number of deals also increased dramatically over the past 12 months to 295 – a rise of more than 150.

“2014 has been a very active year for the property market. At this point last year no one predicted the strength and pace of the recovery which we have seen in the last 12 months,” Jones Lang LaSalle (JLL) head of research, Hannah Dwyer said.

“The turn-around for investments has been remarkable, with an uplift in the supply of assets coming onto the market, strong demand from investors and increases in values and returns. Essentially we have seen a pent-up surge of workout activity with willing sellers and buyers in the market.”

The country’s REITs – real estate investment trusts – flexed their considerable financial muscle during the year and accounted for 30% of total transaction volumes.

Green REIT’s acquisition of Project Sapphire from Cosgrave Property Group which included three properties: George’s Quay and George’s Court in Dublin 2; and Blanchardstown’s Westend Retail Park was the biggest deal concluded during 2014.

The 650,000sq ft portfolio commanded a €375m price tag putting it comfortably ahead of the next biggest deal for the €311.5m sale of Central Park in Leopardstown which also included Green REIT, along with Kennedy Wilson and Pimco.

As well as direct sales, €21bn of loan sales involving Irish assets were sold last year with Nama, RBS, Lloyds and others disposing of assets with Lone Star, Cerberus and Deutsche Bank providing the demand.

The strong level of loan sales is expected to continue this year with Permanent TSB, Nama, AIB and Bank of Ireland anticipated to sell-off loan assets.

While a slowdown in property sales from last year’s peak is expected this year, sales are still expected to reach €3bn – more than twice the 10-year average.

With a number of large-scale provincial shopping centres having been sold in the second half of last year, a continuation of that trend is likely to make retail the strongest-performing asset class in 2015.

JLL also anticipates a number of new investors to enter the market in search of commercial property deals.