Development land market steams ahead as almost €350m worth of transactions made

According to the most recent DTZ Sherry FitzGerald development land report, figures for the opening six months of 2016 show strong gains when compared to the same period in 2015.
Development land market steams ahead as almost €350m worth of transactions made

The period saw close to €350 million worth of development land transactions close across 84 sites in Dublin, Cork and Galway.

The same period last year had 57 transactions turning over €225 million in sales.

There has also been a notable retained strength in the market, with the end of June sale agreed figures estimating forthcoming transactions in excess of €190m across Dublin, Cork, Galway and Limerick.

Donal Kellegher head of advisory said: “Encouragingly, the sales pipeline strengthened over the course of six months, which bodes well for the remainder of 2016.”

As might be expected, the Greater Dublin Area (GDA — Dublin, Meath, Kildare and Wicklow) accounted for the bulk of transactions, with approximately €317 million worth of land transacted across 58 sites.

This is an increase in terms of both value and number of sites sold, compared to the same period in 2015 with approximately €208m transacted across 35 sites.

The most valuable development site sold during Q2 2016 was a six-acre mixed-use site in Dublin’s Spencer Dock in the North Docklands, which sold for €43m.

Cork dominated transaction activity outside of the GDA, with a notable uplift in sales during the second quarter.

The total value of development land sold in the city to June 2016 comes to approximately €25m.

The most notable Cork sales closing during this period include a 5.1 acre site with expired planning for residential development at Churchyard Lane in Ballintemple which sold for approx. €3.8m.

A 0.8 acre residential site at Western Road, with planning granted for 50 apartments sold for a price of over €3m.

A significant 52 acre residential land bank came on the market at Castletreasure, immediately adjacent to the sought-after southern suburb of Douglas.

This was billed as “the largest and best residential development site to come to the market in the past 10 years” by agent, Savills.

It has scope for 400-550 homes and it is being touted as the next Mount Oval, or Maryborough Woods on the basis of scale and is regarded as one of the best sites to come up for sale in almost a decade in the southern capital.

The 52 acres include sections set aside for civic/neighbourhood and sporting uses, plus a school.

With full planning permission, it’s capable of bringing a sustantial amount of housing to a starved market on the fringes of Douglas in the coming years.

The site is part of the Treasure Collection and was guided at €25m when it appeared on the market as a private treaty sale through Savills early in the year.

The Castletreasure/ Douglas site was part of Dublin-dominated Project Clear, and sold to Cairn Homes in 2015.

Cork sites in the portfolio were deemed surplus to Cairn’s requirements and are being sold on.

It is understood that the Douglas land bank did not make its guide price, but negotiations are ongoing with the highest bidder.

The report concludes that the development land market remained relatively subdued in Galway and Limerick during the first half year of 2016. Well-located residential sites remain in high demand but availability was limited.

Marian Finnegan in DTZ Research said: “Challenges remain, particularly in terms of the supply of residential land.”

She says the Government’s publishing of ‘Rebuilding Ireland – an Action Plan for Housing and Homelessness’ does provide some optimism that there may now be a clear vision for the future of the sector and a strategy on how it will be achieved. It is important, she says, that this is actioned and supported.

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