Irish 2013 deal boom soon to top €1bn

Foreign buyers of distressed assets help push 2013 first-half turnover to above full-year 2012 total

The Irish investment market continues to forge ahead with €610m of turnover in the first half of 2013, according to Savills’ figures.

This is more than 2012’s €576m total volumes and reflects strong demand from foreign buyers, from the US, Germany, UK, Israel and Australia, as well as from domestic investors. CBRE has released similar figures (see chart), logging 34 deals in the first half of 2013.

Domhnaill O’Sullivan, a director in Savills’ Dublin office, said: “We believe the figures will hit €1bn by the end of this month, boosted by Kennedy Wilson’s €306m acquisition of the Castle Market portfolio.”

The US firm is on course to close the deal this month with equity mostly provided by joint-venture partner Varde Partners. Kennedy Wilson was also the buyer in one of this year’s largest completed deals, paying €82m – €12m over the guide price – for Clancy Quay, a private rented residential scheme in Dublin 8.

Savills, which acted for the vendor, receiver Grant Thornton, said there were 10 bidders.

The underbidders are believed to have included Hines, the Irish Comer Group and an Israeli investor.

Kennedy Wilson paid €12m over the €70m guide price for Clancy Quay
Kennedy Wilson paid €12m over the €70m guide price for Clancy Quay

Clancy Quay’s price will reflect a 6.25% yield when it is fully let. Some 270 of the first phase’s 420 flats are completed and 228 are let. Two more phases have planning consent.

The Comer brothers bought another high-profile multi- family asset, Ulster Bank’s Gemini portfolio, comprising four separate blocks in Dublin and Cork totalling 640 flats.

Almost all investments traded this year were bought with equity, but some buyers added debt later.

Barclays recently provided finance for Sanford Lodge and M&G Investments refinanced the 163,000 sq ft 78 Sir John Rogerson’s Quay, let to State Street bank. Both properties were
bought by Kennedy Wilson.

O’Sullivan said Savills expected to see prelets soon to kick-start the first new office development since the downturn, and that NAMA will play a part in bringing forward sites.

Last week NAMA announced that it had set up a qualifying investor fund to facilitate the development of sites in Dublin’s south Docklands (see below).

Green REIT raised €310m of equity this month to become Ireland’s first REIT. It is managed by Green Property, led by Stephen Vernon and Pat Gunne.

NAMA helps kick-start quay scheme

NAMA is contributing a site it controls in Hanover Quay to facilitate a potential 500,000 sq ft development in Dublin’s docklands.

Ireland’s bad bank has set up a qualifying investment fund with Oaktree Capital Management, which acquired the south docks sites on either side of NAMA’s ownership earlier this year.

The US private equity firm bought one site from Lloyds and the other from a local concrete company and has teamed up with Irish contractor/ property company Bennett Group.

NAMA will be a minority shareholder in The South Docks Fund, which in turn is a sub-fund of Oaktree and Bennett’s umbrella fund, Targeted Investment Opportunities.