Investors will spend three times as much on commercial property in Ireland in 2013, according to research released by property consultant Savills.
Total sales for the year are likely to break the 1.5 billion euros mark, as opposed to 576 million 2012.
This figure represents the highest amount since it hit 1.8 billion euros in 2007 before the global financial crash caused values to plummet by up to half.
David Skinner, the real estate chief investment officer at Aviva Investors, which owns 28 billion euros of property in Europe, said;
“After steep falls in property values, Ireland is now one of the highest-yielding markets in the developed world. Irish real estate looks attractive for long-term investors with a moderate risk appetite.”
Eurozone policymakers have recognized Ireland as a success story in comparison with countries like Portugal and Greece, where austerity measures and political instability are inhibiting economic growth.
Ireland is scheduled to exit its EU/IMF bailout programs later this year and is targeting growth of 1.3 per cent in 2013.
Ireland’s shaky recovery has not had an impact on interest from overseas investors like Deutsche Bank’s property arm, as well as JPMorgan and AXA Real Estate. All of them are interested in a relatively-small number of high-quality properties situated in Dublin.
The Irish capital looks like a good bet for investors, as opposed to safer but lower-yielding markets like Paris, London, and Frankfurt.
Yields for prime Dublin offices are about 6.25 per cent, as opposed to 4 per cent in London’s West End, which is one of the most in-demand markets in Europe.
Tenant demand is on the rise and Dublin rents increased accordingly. Office rents increased in March for the first time since the financial crisis. Companies like Facebook, Google and eBay are taking advantage of Ireland’s low corporate tax rates of 12.5 per cent, which is also driving demand.
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