10 Jan 2018

A bright start to 2018 for property investment and take-up

Today’s press carry a number of articles that show institutional interest in the Irish property market remains strong.

The Irish Independent reports that Tristan Capital Partners and SW3 have made their third joint investment in Ireland, buying what will be the tallest office building in Dublin on completion (the 239 ft tall EXO building next to Dublin Port in the North Docklands). The newspaper says that the funds are believed to have made between €70m and €80m in development finance available for the project, but no information on the actual price paid for the asset has been disclosed. EXO is expected to be completed in Q120, delivering another 169,150 sq ft of much needed office space into the Dublin market.

Tristan and SW3 are better known for build-to-rent investments here, owning 335 apartments in Leopardstown and Dun Laoghaire in south Dublin. Another institutional investor interested in that segment is APG, which has agreed to form a €450m joint venture with Hines, the developer of the vast Cherrywood development (also in south Dublin). APG will provide development finance and “own some of the project’s apartments and retail assets”. Phase I of the scheme, which APG and Hines will deliver, will result in the construction of 1,221 build-to-rent apartments and ancillary commercial and community facilities.

Another institution that is lining up a move into the residential market is Irish Life. Better known for its astute commercial property investments, the fund manager now plans to invest capital selectively in specific residential projects. It intends to implement this new investment strategy during 2018, although no information was provided on the quantum of capital that Irish Life will make available for this.

Finally, The Irish Examiner reports that the agency responsible for securing FDI into the country, IDA Ireland, has agreed to let “the upper floors” of a new central Dublin office building, Three Park Place, alongside another three State bodies (Science Foundation Ireland, Sustainable Energy Authority of Ireland and The Marine Institute). IDA Ireland will use Three Park Place as its new headquarters after it moves from the nearby Wilton Park House (which IPUT plans to redevelop). The 170,908 sq ft Grade A Three Park Place office building is currently in the process of being completed by developers Clancourt. While no information was provided on rents, we expect that, given its prime location, they would be at the high end of asking rents in the city at this time.

The continued flow of money into the Irish property market, notably from overseas institutions, reflects a number of factors, not least the strong yields available here and the country’s bright economic prospects.