Ireland Residential Investment Snapshot 2020 - Knight Frank
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Ireland Residential Investment Snapshot 2020
IRELAND RESIDENTIAL
INVESTMENT SNAPSHOT 2020
HEADLINES
42% €1. 26 Bn 3.75%
RESIDENTIAL INVESTMENT WAS THE TOTAL RESIDENTIAL INVESTMENT PRIME RESIDENTIAL YIELDS HAVE
LARGEST PROPORTION OF SPEND FOR 2020 REMAINED RESILIENT
INVESTMENT SPEND THROUGHOUT 2020
Despite the impact of Covid-19 on RESIDENTIAL INVESTMENT 2013 - 2020
world markets throughout 2020,
€3,000,000,000
€3,000,000,000 45%
real estate investment and residential
Residential Investment as % of Overall Spend
investment in particular held up very 40%
€2,500,000,000
€2,500,000,000
well as investors sought out core assets. 35%
€ Residential Spend
Investment volumes in Irish €2,000,000,000 30%
€2,000,000,000
commercial real estate in 2020 were
25%
lower compared to the previous year, €1,500,000,000
€1,500,000,000
however 2019 was an exceptional year 20%
due to a number of large scale €1,000,000,000
€1,000,000,000 15%
transactions such as the Green REIT 10%
sale. €3 billion worth of investment €500,000,000
€500,000,000
5%
transactions closed throughout 2020
€0 0%
of which €1.26 billion were residential €0
2013
2013 2014
2014 2015
2015 2016
2016 2017
2017 2018
2018 2019
2019 2020
2020
deals. This equates to 42% of the Irish
Source: Knight Frank Research
investment market, the highest
percentage of any year since 2013. In
total, there were 27 residential RESIDENTIAL
investment transactions over €1 million SUB-SECTOR
of which four of these deals exceeded
€100 million.
A N A LY S I S 2 0 2 0
Covid-19 paused the market in the
first half of the year with only 21% of
84%
10%
the year’s deals transacting. As the
market came to grips with the PRS
pandemic, deal flow began once again 6% Student
with 37% of the year’s deals crossing Social Accommodation
the line in Q3 and 42% in Q4. There Housing
was also a high volume of off-market
deals which occurred throughout the
year with only 32% of the transaction Source: Knight Frank Research
volumes over €1 million being
widely marketed. INSTITUTIONAL RESIDENTIAL OWNERSHIP
Institutional ownership of residential
assets has increased to over 18,000
I-RES REIT
I-RES REIT Roundhill Kennedy Wilson
units throughout Ireland with the Kennedy Wilson Tristan Capital
23%
Comer Group
LRC Europe
highest proportion being in Dublin. Comer Group Hibernia REIT Urbeo
DWS
IRES-REIT and Kennedy Wilson LRC Europe Real IS Avestus
Orange Capital Partners
remain the largest institutional Urbeo Greystar 4% Patrizia
Carysfort Capital
holders of residential units at 23% DWS Henderson Park
6%
Irish Life
and 18% respectively. Avestus, DWS, 18%
Roundhill
Avestus Heitman Tr istan Capital
IRES-REIT, Orange Capital Partners, Orange Capital Partners 6% Hibernia REIT
Real IS
Irish Life, Roundhill, LRC Capital Patrizia 7% Greystar
7% 8%
Henderson Park
and Urbeo all added to their existing Carysfort Capital Heitman
portfolio’s throughout 2020. Irish Life
Source: Knight Frank Research
1.TOP 3 DEALS OF 2020
1 2 3
€195 Mn €145 Mn €140 Mn
CUALANOR, DUN LAOGHAIRE PRESTIGE PORTFOLIO ACQUIRED CONFIDENTIAL TRANSACTION
ACQUIRED BY DWS FOR BY DWS FOR €145 MILLION COMPLETED FOR €140 MILLION
€195 MILLION
Dublin was the focus of residential 2020 RESIDENTIAL INVESTMENT
investment transactions throughout T R A N S A C T I O N S B Y L O C AT I O N
2020. This is not surprising
considering the shift towards core
assets seen across the entire
CRE sector.
37% 27% 22% 9%
• Of the reported deals, Dublin’s South 5%
Suburbs remains a key location for
investors with 37% of the investment
volume transacting here.
Dublin Dublin Dublin Dublin Dublin
South North City West Various
• The north suburbs were a close
Suburbs Suburbs Suburbs
second with 27% of transaction
volumes. Source: Knight Frank Research
TOP 5 RESIDENTIAL INVESTMENT DEALS 2020
Quarter Property Sector Deal Structure €m Purchaser
Cheevers Court & Haliday
Q3 2020 PRS Forward Commit €195m DWS / SW3 Capital
House
Q3 2020 The Prestige Portfolio PRS Forward Commit €145m DWS / SW3 Capital
Q4 2020 Confidential PRS Forward Commit €140m Confidential
Round Hill Capital & Quad Real
Q4 2020 Blackwood Square PRS Forward Commit €123.5m Property Group
Former Brewery Block,
Q1 2020 Student Forward Commit €85m Round Hill Capital / NBK Capital
Newmarket Square
Source: Knight Frank Research
Investor activity has arguably been held IRELAND,
back by limited supply and Covid-19 UNITS WITH A GRANT OF PLANNING
construction constraints.
No. of Units Private flats / Apartments Houses / Excluding
• While the number of completions for 16,000 Individual Dwellings
16,000
first nine months of 2020 were lower
14,000
14,000
than the same period in 2019, grants
of planning increased by 22%. 12,000
12,000
10,000
10,000
• In the first nine months of 2020,
20,656 apartment units were granted 8,000
8,000
planning permission, of which 16,752 6,000
6,000
(81%) were SHD applications.
4,000
4,000
• With this increase in granted schemes 2,000
2,000
there is a clear pipeline of future stock 0 0
for both the investment and private 2018
2018Q3 2018
2018Q4 2019
2019Q1 2019
2019Q2 2019
2019Q3 2019
2019Q4 2020
2020Q1 2020
2020Q2 2020
2020Q3
sales market. Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Houses Private flats/apartments
Source: CSO
2.RESIDENTIAL INVESTMENT YIELDS
Prime residential investment yields in Dublin have remained stable
throughout 2020 despite the onset of Covid-19.
3.75%
3.25%
In comparison to other major European destinations for residential 3.25%
investment, Ireland and Dublin remain competitive and this is one
of the key factors that will continue to attract institutional investors 3%
to the Irish market throughout 2021.
OUTLO OK 2021 2.9%
2.5%
• Flight to quality and professionally managed schemes
• Supply shortages to continue
• Emergence of forward funding deals
• Trading of long income social leases
• Growth in management operating platforms and
3%
technology links
• Increased importance in ESG
• Strong demand for portfolios of single-family housing
• Continued debate on the importance of micro/co-living
within cities
EUROPEAN RESIDENTIAL INVESTMENT MARKET
Germany France Spain Netherlands Austria Ireland UK
Rent Rent Rent Some
Rent Restrictions/ Tenant Rent Cap controls controls Regulated & Regulated & controls affordability
Rights in Berlin in Paris being free market unregulated in RPZ’s requirements
discussed
Prime Net Initial Yield 3% 2.5% 3% 3.25% 2.9% 3.75% 3.25%
Prime Gross Yield 3.35% 3% 3.7% 3.5% 3.1% 4.5% 4.3%
Prime PRS Cap Val (per sq m) €7,500 €10,700 €5,750 €10,000 €6,500 €8,000 £8,500
Avg Rent Per Sqm per Month €22 €27 €14.50 €22 €13.5 €30 £30
uu This table shows prime yields and cap vals for stabilised assets in capital cities (Berlin in Germany) and as such these will vary
for regional cities. Capital Value and Rent numbers reflect good quality product in un-regulated rental markets uu
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