Investment into Dublin’s property market hit €1.9bn (£1.7bn) during the first six months of the year, according to BNP Paribas Real Estate.
The second quarter was particularly active, doubling Q1’s €618.3m to reach €1.24bn in Q2.
Deals have soared amid an increase in European appetite, with Brexit a possible cause, said BNP PRE associate director and head of research Kate Ryan.
“We are seeing an increase in the level of investment from mainland Europe, potentially as a result of Brexit due to a bounce in investment from UK to Ireland,” she said. “European investment accounted for 25% of H1 turnover, compared with 19% in 2018 overall.”
Residential was the top-performing sector this quarter, with more than €600m invested across 12 PRS deals (48% of turnover).
Previously, in Q1, residential accounted for 30% of the total, with offices representing half of all transactions.
In Q2, offices accounted for just 19% of turnover, with €233m invested, down from €283m in Q1. However, a number of significant deals are at the sale-agreed stage and likely to transact in Q3.
The largest office deal of the quarter was the sale of a portfolio of offices in Citywest, Dublin 24, for €125m to Henley Bartra, a joint venture between UK investors Henley and Bartra Properties.
Retail represented 8% of turnover, with just under €96m invested across nine deals (down from €186m in Q1).
In the lettings market, office take-up was low in Q2, with just circa 322,000 sq ft leased across 50 deals. This compares with take-up of more than 1.4m sq ft in Q1.
Take-up for the first half of 2019 stands at around 1.8m sq ft, which represents an increase of 4% on the same period in 2018.
European investors flock to Dublin
Key European deals include German investor DWS’s purchase of 7-9 Henry Street in Q1 for around €44m and 214 apartments at the Fairways Dún Laoghaire in Q2 for €108m.
Union Investment, another German fund, purchased Ballast House (a mixed-use development in Dublin 2) this quarter as well for €26.9m.
German fund Wealthcore Group is also in talks to buy Airbnb’s Dublin office for around €160m. The Reflector, one of Dublin’s iconic new office buildings, was put up for sale in February for €155m. The 121,089 sq ft, six-storey office block is in Dublin’s Grand Canal Dock area.
Swiss Life purchased the Lennox Building in Dublin 2 this quarter for close to €27m, while Cypriot investor LRC Group acquired a €150m portfolio of residential assets to bring the total number of Irish residential properties in its portfolio to just over 1,600.
Dublin property investment in numbers
- €1.9bn – total investment during H1
- 25% – proportion of total investment originating from Europe
- 1.8m sq ft – H1 take-up
- €125m – largest office deal in H1 – a portfolio of offices in Citywest, Dublin 24, to Henley Bartra
- €600m – residential investment in Q2 –the top-performing sector during the quarter
Source: BNP Paribas Real Estate
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