Belfast Telegraph

Investment property deals in Republic hit record level

The Sorting Office was sold for €240m
The Sorting Office was sold for €240m
Allianz House went for around €53m

By Donal Buckley

The Irish investment property market broke new records this year - exceeding all expectations with nearly €5.92bn (£4.9bn) worth of investment deals.

Stephen Vernon and Pat Gunne's sale of Green Reit to Henderson Park for €1.34bn (£1.12bn) was the key deal which helped to hit the record peak.

That portfolio includes some of Dublin city centre's most valuable office buildings such as One Molesworth on Dawson Street with its Ivy Restaurant as well as the Central Park complex in Leopardstown.

As much as €2.865bn (£2.39bn) of the deals came in the last quarter of the year, amounting to almost half of the value.

Much of that appears to have been in train before the Republic's Finance Minister Paschal Donohoe increased stamp duty rate on non-residential property to 7.5% from 6%.

Agents are advising that the minister should not expect the market to replicate this performance in 2020.

"Record low interest rates have been a key factor boosting demand and the attractions of such low rates will be offset by the high rates of stamp duty," one agent said.

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"This will mean that those investors who buy with the hope of selling within a few years are more likely to hold on."

Consequently fewer properties may come to the market.

Portfolios of build-to-rent residential properties were also a major contributor to the new record. However, they generate only 2% stamp duty.

Among the late commercial deals to close this month was Aberdeen Standard's sale last week of Allianz House, one of the office blocks at Elmpark, Dublin 4, for about €53m (£44.2m).

It was purchased by German fund Quadoro Doric which already owns office blocks in Dublin and Cork cities.

The year also saw increased interest from Far-Eastern investors. Singapore-based Mapletree Investments secured some of the most valuable individual purchases.

It paid around €240m (£200.4m) for the Sorting Office, developed in south docklands and bought two office blocks known as Nova Atria in Sandyford for around €167m (£139.5m).

Belfast Telegraph