Real estate investments in Ireland hit a record € 350 billion in the first three quarters of this year, with estate agents reporting pent-up demand for real estate since the easing of Covid restrictions.
An analysis by Savills found that almost € 800million was invested in the Irish property market in the third quarter, a figure 25% higher than a typical third quarter compared to the long-term average.
Savills said in 2020 that travel restrictions were hampering the ability of foreign investors to physically travel to Ireland.
“We are now seeing a resumption of the strong activity levels present before the pandemic with several important agreements close to being signed which should lead to a strong fourth quarter,” said Brendan Delaney, divisional director of investments at Savills.
“Based on our analysis, we expect year-end totals of between € 4.75 billion and € 5.25 billion in 2021, the second strongest year of this cycle. “
The report found that the retail sector performed strongly, accounting for 107 million euros in transactions in the third quarter, or 14% of total volume; this is the first time since the first quarter of 2019 that the sector represents more than 10% of total volumes.
“We have seen strong demand with various offers received both for individual lots and for the entire portfolio,” said Mr. Delany.
Savills said investments in the office sector during the third quarter were less than € 140 million and generally involved smaller lots, with individual trades under € 30 million and for shares of secondary quality.
“We expect this to change as the end of the year approaches as the industry begins to recover from the impact of the pandemic,” said Delaney.
September 20 marked the gradual return to office work as restrictions were lifted with most businesses in Ireland and around the world providing for a hybrid work model between office and remote work.
However, office developers and real estate agents say they are confident about the future demand for office space.
In Cork City, construction has started in recent weeks on Horgan’s Pier 2, adding 130,000 square feet of space to the six-acre CIE-owned site as part of a 160-year mixed-use development. million euros by Clarendon Properties and BAM.
A separate report from Savills on the Dublin office market found that activity reacted strongly in the third quarter after a cautious first half.
The office take-up reached 396,000 square feet with a total of 42 completed transactions. While this is well below the long-term average of 668,000 square feet per quarter, it is a marked improvement over the 23,000 and 147,000 square feet that traded in the first and second quarters respectively.
They said there are now encouraging signs that the market is strengthening as occupiers begin to have more clarity on the post-pandemic world of work and government restrictions begin to loosen.
Shane Duffy, office manager for Savills Ireland, said after a dismal first half, transactional evidence in the third quarter was “very encouraging” for the office market.
“The occupants are focused on ensuring the best options at the best achievable rental terms, in line with the growing emphasis on environment, social and governance (ESG),” said Mr. Duffy.
“The number of weekly views throughout September was higher than at any time in 2019, representing clear pent-up demand in the market.”