ULI Irish council kicks off

IRELAND has a 18-to-24 month window of opportunity to attract international capital to quality assets to be disposed of — after that, revaluation of other competing assets in countries like France, Spain, and Holland will add to the competition for mobile capital.

That’s according to Brian Moran, the chairman of the just-established Irish council of the Urban Land Institute (ULI), a 30,000-member strong global real estate think-tank research and education organisation. Ireland this week became the 14th European ULI council, among 95 countries worldwide.

“We are seen as being further along the recovery curve than a number of other European countries, and as a result there’s good international capital interest in investment in Ireland,” said Mr Moran.

After Spanish banks get to deleverage and other European banks also rebalance their sheets, Ireland’s current advantageous head-start will diminish, he stressed.

However, the international view is that pace of stock being released for sale here is slow, and deals have been hard to close with low levels of successful transactions to date, causing frustration among prospective bidders, said Mr Moran, who also heads up the Irish offices of major real estate investors as Hines Ireland MD.

Among those at this week’s inaugural Irish ULI council gathering were Marc Mogull, managing partner at Benson Elliott Capital Management, and Joe Montgomery, CEO of the Urban Land Institute in Europe, and others participating in the first round-table discussion included representatives of Nama, banks, brokers, developers, accountants and academics. The international feeling voiced from the meeting held at Bank of Ireland College Green was that too much stock is still being “warehoused” rather than being brought to market to satisfy current demand. Last year’s investment market saw just €170m spent, this year it stands at €300m to date, and may end the year at over €600m, and €1bn could be done next year. But, according to Mr Moran, the value of Ireland’s commercial real estate investment market that needs to be recapitalised is c €50bn and “there’s no shortage of capital equity and debt available at present.”

According to Mr Moran, international capital can bring its own debt from abroad, while this week’s ULI gathering heard Irish bank representatives say they had capital available and hadn’t managed to do enough recapitalisation. “Capital shortage is not an issue” he said.

Internationally, Ireland is seen as having stabilised, with the risk of pulling out of the euro now off the agenda, and demographics and export growth showed underlying economic strengths.

Preferable lot sizes/investment bundles for overseas investors were typically from €15m-€20m upwards to justify costs, and the native Irish investor with ‘mattress-money’ is strong in the sub€2m bracket, leaving a buyer gap in the €2m to €15m bracket.

ULI’s a non-profit and non-lobbying research and education group founded in Chicago in 1936, with a high international profile and esteem, and its Irish council is expected to provide international investors with insight and confidence in the market.

ULI’s Irish executive includes chairman Brian Moran, Hines Ireland, Tom Dunne, DIT; Niall O’Keeffe, National Association of Building Co-Operatives (NABCO); Enda Faughnan, PwC Ireland; John O’Connor, Housing Agency; Guy Hollis, CBRE; Kevin Hoy, Mason Hayes + Curran; John Bruder, Burlington Real Estate Limited, and Donald MacDonald, Hooke & MacDonald.

Details: www.uli-europe.org