Irish Investment Market Q3 2024

Sherry FitzGerald, Ireland’s largest estate agent, reported today (Thursday, October 10^th, 2024) that transaction activity in the Irish investment market continued to strengthen during the third quarter of 2024 to reach €591[i] million. This represents a 26% increase on the same period in 2023 and is the highest quarterly level recorded in eighteen months.

Interestingly, the increase in turnover primarily reflects the return of large-scale transactions with 13% of all sales valued at €50 million or greater. Notably, only 24[ii] transactions closed during the three-month period compared to 34 sales in the previous quarter.

According to Jean Behan, Senior Economist and Head of Research, Sherry FitzGerald; “The investment market continued to show positive signs of recovery in quarter three, buoyed by improved conditions in the international interest rate environment and more favourable asset pricing. Inflationary pressures across Europe and in the US have eased significantly in recent months increasing expectations for further interest rate cuts in the medium term, which bodes well for the investment market going forward.”

The retail sector remained the dominant driver of investor spend during quarter three, accounting for a third of turnover or almost €196 million. This includes the significant sale of The Square Shopping Centre in Tallaght, which was purchased by Eagle Street Partners and Arrow for an estimated €130 million. Interestingly, both the office and industrial markets saw a resurgence in transaction levels during the three-month period with each sector accounting for 23% of total investment. Notably, this is the highest level of quarterly spend on office assets in a year, comprising 10 assets, a number of which formed part of the Ronan Group Real Estate portfolio being sold by receiver Grant Thornton.

Quarter three also witnessed the first significant Purpose Built Student Accommodation transaction in two years with the sale of Scape’s 299-bedroom asset in Stephen Street, Dublin 2 for an estimated €80 million to Hines.

Commenting on market activity, Ross Harris, Director, Commercial & Residential Investment, Sherry FitzGerald said “The recent improvement in investment activity is very encouraging. However, PRS investment has yet to experience a similar recovery with PRS transactional activity remaining hampered by viability issues and current government policy, which remains challenging for institutional investors. Uncertainty over future interventions is likely to see PRS investors remain cautious until after the upcoming elections.”

In the year to date, investment turnover totalled almost €1.3 billion. Although this is 13% below the same period in 2023, this reflects the record low level of activity recorded in quarter one. Focusing on the last six months reveals that turnover at €1.1 billion exceeds that of the corresponding period in 2023 by 37%. That said, the market is at the very early stages of recovery and overall activity remains below average.