Ireland Investment Market Q2 2022

The Ireland Investment Market Overview Q2 2022 is out now. Download the full report.

Robust demand in the occupational markets continued to support investment activity in Q2 with €2.3bn transacting, bringing the total spend for H1 to €3.1bn. Even when the exceptional sale of Hibernia REIT to Brookfield for €1.1bn is excluded, total spend for H1 (€2.0bn) remained comfortably above the average half year spend over the last five years (€1.7bn).

Looking at Q2 in more detail, due to the significant demand-supply imbalance, a substantial amount of capital continues to target new-build core assets in the PRS sector which comprised 35%* of spend, while assets offering strong sustainability credentials and security of income continue to drive demand in the offices sector which accounted for 22%* of spend. Forward funding transactions are becoming increasingly commonplace in the industrial market, which comprised 14%* of spend, as investors grapple with a shortage of opportunities, while retail warehouses and shopping centres drove investment in the retail sector which accounted for 12%* of spend.

Pricing in Dublin remained stable for prime assets due to the shortage of opportunities, however concerns around rising inflation, interest rate increases and geopolitical uncertainty could result in some pressure on pricing in H2 and into 2023. We expect to see increased polarisation, driven by asset, location and covenant considerations, with residential, prime office and prime logistics assets set to benefit the most. 

Robert O’Connor, Senior Research Analyst, Knight Frank Ireland

*Calculation excludes the sale of Hibernia REIT