Notable large-scale transactions complete in Q3 albeit investment activity remains relatively low

CBRE Ireland today confirm that a total of €444 million was invested into Irish commercial property in Q3 2023, spread across 30 transactions. The Q3 total is below the long-term quarterly average in the Irish market, which is approximately €1.1 billion.

At the end of Q3, total year-to-date spend in the Irish market is just €1.4 billion. Over the last 10 years, the Irish market has averaged approx. €4.3 billion per annum in investment spend, with both 2019 and 2022 significantly higher due to the sale of Green REIT and Hibernia REIT respectively. This year the Irish market will likely record less than 50% of that level.

Despite the relatively low level of spend, encouragingly, some notable, large-scale transactions completed in Q3, including the largest deals of the year in the office, retail, and healthcare sectors.

The largest transaction in Q3 was the sale of George’s Quay House in Dublin 2 to French asset manager Corum Asset Management. The building forms part of the larger George’s Quay development. The sale price of this transaction was more than €80m. The vendor, Henderson Park, was advised on the sale by CBRE. Office investment accounted for the largest portion of spend in Q3, at nearly 40% of the total, showcasing investor appetite for office buildings with refurbishment potential, with a particular focus on improving sustainability credentials.

Among other major deals in Q3 was the sale of the Hexagon Shopping Centre portfolio for €74m, a collection of six regional shopping centers, the largest retail investment transaction of the year. Other notable retail deals in Q3 include the sale of the Marshes Shopping Centre in Dundalk (with the vendor, Kennedy Wilson, advised jointly by CBRE and Bannon). Retail spend accounted for 33% of all investment in the quarter, highlighting the continuation in renewed investor interest in the sector.

A notable deal also completed in the healthcare sector in Q3. Primary Health Properties (PHP) continued to grow its Irish portfolio with the acquisition of an Enhanced Community Care facility in Ballincollig, Co. Cork. The sale price was over €30m. The vendor in this case was jointly advised on the sale by CBRE and Cushman & Wakefield.

According to head of research at CBRE Ireland, Colin Richardson, “commercial real estate investment markets around Europe continue to adjust to a higher interest rate environment, and as such, investment activity remains relatively low. However, Q3 transactional activity in the Irish market improved on the level seen in Q2, and the number of large-scale deals that completed this quarter was particularly encouraging. Private investors are some of the most active in the market at present, while French funds continued to show interest in the Irish market in Q3. Institutional investors are being more selective in assessing investment opportunities at present, but what this quarter shows is that there is continued appetite for investment into sectors such as offices, that are perceived to be out of favour”.