More than €2 billion was invested in the Irish property market in the final quarter of 2021, bringing the total for the year to €5.5 billion, according to figures from real estate agent Savills Ireland.
This compares to investment of €3 billion in 2020 and is the second-highest level ever recorded, it said, citing “increasing clarity” on the pandemic and beneficial economic and monetary conditions.
The largest transaction was Blackstone's acquisition of the Serpentine consortium's interest in Meta's new European campus in Ballsbridge, Dublin, for €395 million, while KPMG's fourth-quarter pre-letting of 290,000sq ft at Hibernian Reit's Harcourt Square development, due in 2026, was the largest office leasing transaction of the year.
“Investor appetite has been exceptionally strong throughout the year across most real estate sectors. The last quarter of 2021 was characterised by multiple large deals in the office and industrial sectors in particular, accounting for 36 per cent and 27 per cent of quarterly volumes respectively,” said Kevin McMahon, divisional director of investments at Savills Ireland.
The acquisition by US private equity giant Blackstone, which concerned four buildings on the new Meta (previously known as Facebook) campus, followed strong bidding from several parties, Savills said.
The transaction highlighted “the depth of capital and confidence international investors have in the office market” despite pandemic-triggered uncertainty about future working practices, it added.
"The office leasing market can be summarised by a year of two halves. After a largely dormant first six months of 2021, the office market finally burst into life in the final two quarters, with significant leasing activity taking place," said Shane Duffy, director of offices at Savills Ireland.
‘Buoyant’ 2022
The agency predicted 2022 was likely to see a “buoyant” office market as workers return, while the retail sector will also likely record a “more positive” year.
The final quarter of 2021 saw strong trading in the retail sector as 13 assets exchanged, the largest of which was the Park Collection, a portfolio of prime retail parks sold to Marlet Property Group by Marathon Asset Management for €74 million.
Retail parks have performed well during the pandemic, driven by stable demand for electrical goods, furniture, food and household items, Savills noted.
In 2021 the industrial sector’s share of investment volumes continued to grow, it added, accounting for 18 per cent of the market. The sector’s vacancy rate in Dublin remained at a historic low of about 1 per cent throughout 2021.
