Commercial property investment spending more then doubled in 2014 and the total turnover of €4.5 billion represents a 40% increase on the previous record for the Irish market which was set in 2006. In terms of transactions numbers, almost 300 deals were done in 2014 – nearly three times the number completed in 2006.
This dramatic upsurge in activity reflects a combination of factors that have led to very strong demand for Irish investment property and, at the same time, very liquid supply arising from the financial institutions’ deleveraging programmes.
Focusing firstly on demand, the global appetite for risk bearing assets has been driven by falling bond yields; as the risk free rate of return has declined investors have had to move into higher yielding assets - including commercial property - in search of better returns. With the ECB commencing its long-awaited quantitative easing (QE) programme on 9th March it is clear that bond rates are set to remain very low for the foreseeable future. Therefore there will continue to be a weight of money with ambitions to buy into real estate investments.
Source : Savills