Signs of slowdown in development land sales in H1
Dublin, 3rd July 2020 – Property consultants CBRE Ireland have today released figures for the volume and value of development land traded (both on and off-market) in the Irish market in the first six months of 2020, which shows that 32 land sales were completed in the year to the end of June, totaling almost €121 million between them. This is the lowest opening half-year of spend on development land since 2013. The impact of the Covid-19 enforced shut down of the Irish economy saw just €17 million of transactions recorded in Q2.
“After a robust opening quarter, activity in the development land sector has effectively ground to a halt over recent months. Although there are some buyers targeting site acquisitions in the current climate, unlike previous property market downturns, there is little sign of distress”.
In addition, CBRE say that over the longer term, alternative lenders will have less ability for forbearance than the pillar banks, particularly where equity stakes have eroded, and this might in time give rise to opportunities to acquire sites. However, for now, there are few opportunities to acquire land with most sales campaigns on hold. CBRE say that this is likely to remain the case until the official selling season commences in the Autumn, by which time we may see some vendors releasing sites for sale and generating market evidence. CBRE say that pricing sites will remain challenging until such time as there is clarity on funding costs and the impact on construction costs as a direct result of Covid-19 delays and changes to work practices on sites. Meanwhile, the property consultants say that it is encouraging that anecdotal evidence suggests good appetite for residential properties since trading recommenced in recent weeks.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
CBRE U.C., (CBRE Ireland) registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company with offices in Dublin and Cork. Currently employing over 150 employees, we work with occupiers, investors and developers of office, industrial and logistics, retail, hotel and healthcare property, providing strategic advice and execution for property sales and leasing; tenant representation, corporate services; property and project management; appraisal and valuation; development services; investment management and debt advisory; business rates and compulsory purchase and research and consulting. Please visit our website at www.cbre.ie