Residential investment spending hits highest levels in over two years

Sale of two private rental sector assets drive rebound in transaction activity

Spencer Place in Dublin North Docklands sold for €177m during the third quarter. 

Spending on residential investment properties hit their highest quarterly levels in two and a half years, driven by the sale of two large properties in the private rental sector, a new report by estate agent Sherry FitzGerald shows.

The overall investment property market saw a resurgence in activity between July and September, with total turnover reaching €699m — an increase of 16% compared the same period last year — with strong interest in residential, office and industrial assets.

In particular, spending on residential assets reached €260m, with the most significant transaction in this sector being the sale of Spencer Place Residential in Dublin’s North Docklands to Ardstone for €177m. This was the largest private rental sector transaction since the first quarter of 2021.

This development comprises 360 private units across two blocks, including build-to-rent apartments and co-living spaces.

The next largest transaction was the acquisition of Birchwood Court in Santry, Dublin — consisting of 180 build-to-let apartments — also by Ardstone for €79m.

“The resurgence of capital spend on residential assets during the quarter signifies improved sentiment among investors in this segment of the market,” the report said.

The report noted the spending on residential property was supported by the “low interest rate environment”, and the recently announced changes to the private lettings sector, which are scheduled to come into effect in March.

In total, 34 transactions closed during the quarter across the entire market.

Office buildings

There were 12 transactions involving office buildings, with the total transaction cost totalling €247m. The largest transaction in this segment was by French investor Corum, which acquired 24-26 City Quay from Irish Life for €55m.

“Two further significant transactions include the sale of La Touche House by Axa Investment Managers for approximately €36.5m, while 1 and 2 Shelbourne Buildings was purchased by French investor Arkéa for approximately €35.8m,” the report said.

The report said there had been a gradual decline in the office vacancy rate and with “very little speculative development due to come on stream in the short term", the vacancy rate is expected to “continue to decline”.

Industrial and logistics assets also witnessed a rebound in activity, with investor spend reaching almost €93m, or 13% of total turnover.

Investment in retail properties was more “subdued” during the quarter, with €61m spent.

Overseas investors accounted for 40% of total capital spend during the third quarter, with French investors being particularly active, accounting for 30% of turnover.

In the first nine months of the year, investment turnover has totalled €1.6bn — surpassing levels recorded for the same period in 2023 and 2024.

So far in 2025, office assets attracted the largest proportion of capital spend at 32% — reaching €527m. Retail assets attracted 30% of investor spend over the nine-month period, to reach €492m.

The report noted while the retail segment declined across the third quarter, the market has seen a number of significant transactions over the last 18 months, exceeding €100m in value.

“This sector remains buoyed by continued robust consumer expenditure. Notably, the sale of Jervis Shopping Centre is reportedly close to completion for in excess of €100m, suggesting that quarter four will be another period of strong retail activity,” the report said.