Ireland Investment and Funding Market Overview Q3 2022

October 27, 2022

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  • The dynamics of the European investment market have changed in the last 3 months as the interest rate cycle evolves, and both the risk-free rate and the cost of debt financing increase
  • Real estate investment volumes, both in Europe and Ireland, remained strong in Q3. However, this gives a false impression of the health and liquidity of the market at present
  • Bid offer spreads have widened as investors assess the impact of rising interest rates on pricing, with a thinner pool of buyers and financiers now operating in the market
  • A total of €1.8bn of Irish investment transactions completed in Q3, bringing the total year-to-date spend to €4.9bn. The market is now on course for its second-strongest year on record
  • The sale of the Salesforce office HQ elevated office investment spend in Q3. However, several large ticket transactions also concluded across the residential, healthcare and hotel sectors
  • Prime yields in the Dublin market have traded at a wider level than European peers in recent years. While yields are now under pressure, Dublin has not seen the same pricing declines to date
  • At the end of September, the 3-month EURIBOR swap rate for a 5-year term was 2.87%, an 110bps rise since the end of Q2