German fund BVK’s bid to buy Liffey Valley shopping centre in Dublin for €540m (£488m) would push the total value of Irish retail property bought by non-domestic players over the past 14 months to €3.4bn.
With Ireland hit hard by the last recession and economic wobbles occurring again in the UK, why are investors spending so much in a country of just 4.8m people?
In July 2015, Hammerson and Munich-based investor Allianz bought the Dundrum Town Centre mall for €1.9bn, while in June this year Blackstone spent €950m buying the Blanchardstown Centre from Green Property Group.
Although the Irish market has been active compared with the UK, sources involved in the deals said there were no more than two bids on some of the larger schemes, because many investors were concerned about tying up so much cash in one asset.
However, the Irish economy has seen exceptional growth. According to Davy Research, employment is up by 2.9% this year, last year GDP grew by 26.3%, net migration in the year to April 2016 was positive for the first time since 2008, and consumer spending is expected to grow by 3.7% in 2017. Retail rents are expected to rise as a result.
Simon Betty, director of retail, Ireland, at Hammerson, said: “Ireland has a stable government, good property rights, strong institutions and its property market is similar to that of the UK.”
He added: “There have been a number of major retail assets brought to the market and the fact that they have all sold is a logical extension of that economic recovery.
“It is, however, a little unusual for such a concentration of retail assets to have changed hands in such a short period.”
Both Blanchardstown and Liffey Valley come with vast development prospects. At Blanchardstown there is capacity for an additional 1.6m sq ft comprising around 1m sq ft of shops, offices, leisure and
more than 600 flats under a masterplan governing the site. Liffey Valley also includes 17.3 acres of adjacent development land.
Liffey Valley is BVK’s first investment in Ireland. Hines will have the option to stay on as asset manager at the mall.
Irish bumper shopping centre purchases
Liffey Valley
Buyer: Bayerische Versorgungskammer
Seller: Hines, HSBC Alternative Investments and Grosvenor
Price: €540m
Size: 520,000 sq ft
Development potential: 17.3 acres of adjacent development land
Dundrum, July 2015
Buyers: Hammerson and Allianz
Seller: Nama
Price: €1.9bn
Size: 1.5m sq ft
Development potential:
27 acres of development land
Blanchardstown, June 2016
Buyer: Blackstone
Seller: Green Property Group
Price: €950m
Size: 1.2m sq ft
Development potential: capacity for an extra 1.6m sq ft
• To send feedback, e-mail amber.rolt@estatesgazette.com or tweet @AmberRoltEG or @estatesgazette
