Belfast Telegraph

Foreign capital is 'likely to stay in property'

By Richard Curran

International capital has driven the property recovery since 2012, leaving some to wonder what might happen when the foreign money dries up. So far there is no real sign of that happening. The recession narrative some put forward went with international investors taking cheap properties and flogging them at exorbitant prices to locals, who in turn would eventually get fleeced again.

But the latest developments in the residential market suggest international investors believe there aren't any shocks coming soon.

The most significant development in residential investment has been build-to-let as there seems to be more money in renting out apartments and houses after you have built them, than in selling them on.

Kennedy Wilson is buying up and building more housing units and apartments with a view to renting them out. During the week it finalised its joint venture arrangement with Axa Investment Managers which sees them share 50:50 in 1,173 apartments.

On the developer side, Cairn Homes has sold its 120-unit development at Six Hanover Quay in Dublin's Docklands for €101m (£89.4m). The development cost was estimated to be around €65m (£57.5m), which sees the company bagging close to €36m (£31.9m) in profit.

The buyer is Carysfort Capital, an Irish investment fund which plans to rent out the properties. Carysfort bought 100 houses in St Edmunds Liffey Valley adjacent to 160 apartments it had already bought in December 2016 for €36m. This wall of cash is creating some very sizeable landlords especially around Dublin.

Demographics suggest the demand for housing in Dublin will keep going for some time to come. Many major international investors do not worry that rents in Dublin are going to fall.

A lot of money is being bet that rents are only going to go one way - and it isn't down.

Belfast Telegraph