€1.7bn invested in real estate in Ireland this year

A total of €1.7bn in capital has been invested in Irish real estate this year, including direct investment of €800m.

Jones Lang LaSalle, in its analysis of the year’s trade so far, said the largest transaction was Project Sapphire, which Green REIT purchased last month. The sale totalled €375m and included three assets: George’s Quay, George’s Court — both in Dublin 2 — and commercial space in the Westend Retail Park in Blanchardstown.

The move by the investment property company comes alongside a number of loan sales, including Project Button (RBS), Project Tower (NAMA) and Project Drive (NAMA), which, combined, are worth an estimated €2bn.

Another property investment fund, Hibernia REIT, has also been busy, recently buying the Observatory Building in city-centre Dublin for €52.25m, from NAMA. The property comprises 86,213 sq ft of office accommodation over six floors, as well as eight partially completed, two-bedroom apartment units of c 1,400 sq ft each, and two vacant retail units fronting onto Windmill Lane. Kevin Nowlan, chief executive officer, WK Nowlan REIT Management Limited, said the property would offer significant benefits in the longer-term, through active asset management.

Overall, the level of movement within the sector is seen as a positive indicator of a recovery market.

Hannah Dwyer, head of research at Jones Lang LaSalle, said: “There is a large supply pipeline for the second-half of 2014, with NAMA, Bank of Ireland and Ulster Bank expected to be the most significant sellers in the next six months. The demand for Irish property assets remains strong, with new investors continuing to enter the market. As a result, we expect total volumes for direct and loan sales to hit €4bn this year, which is €600m ahead of the peak in 2006.”

John Moran, managing director and head of investments, said that, “as predicted, 2014 has been the year of the portfolio sale, with a large number already sold, so far this year. We are increasingly seeing vendors packaging assets together for disposal, instead of individual lot sales. At present, these are achieving a premium from purchasers, with significant interest and competition for these types of assets.”

In addition, NAMA has also moved on its single largest transaction, by concluding the Portfolio Eagle loan sale with Cerberus Capital Management.

The portfolio is valued at €5.6bn and is linked to loans secured on Northern Ireland assets, and those elsewhere, where the under-lying properties are owned by debtors in the North — including the Lanyon Plaza and the Soloist buildings in Belfast.

On the latter two properties, NAMA is providing almost €19m to complete the major office development, in a move NAMA said would enhance the value of its assets in the North.

It said work on the project had been delayed for a time, due to market conditions, and politicians and the business community in Belfast have welcomed the move.

The 90,000 sq ft Soloist Building was designed by Norwegian architect, Neils Torp, and work on phase one finished in 2010. Lanyon Plaza is larger again, at 100,000 sq ft, but work on the 15-storey office block stalled in 2010.

Northern Assembly Finance Minister, Sammy Wilson, said: “Lanyon Plaza, and the surrounding buildings, including the Waterfront Hall, are landmark buildings for Belfast city centre and the announcement will ensure that Lanyon Plaza will not now be lying idle.”

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