Since the property market crash, private equity and investment groups have descended on the Dublin commercial property market and have been able to pick up some bargains the Irish Times reports.
One of the biggest investors to enter the Irish commercial property market over the past 12 months has been Kennedy Wilson, a US property investment group. There has also been growing interest from buyers in Australia, China, Singapore, Malaysia, Russia, Israel and Malaysia.
John Moran, Jones Lang Lasalle’s managing director, said, “What’s interesting is that this is really the first time that there has been serious international buying in the Irish market.
“The Irish market traditionally was left to the Irish institutions, developers or property companies, and it is probably the first time we’ve seen a real significant sea change of ownership in the market.”
Another development is that loan portfolios are being sold off to investors. Those who were well positioned to act quickly were able to take advantage of some bargains in the market.
Several of the portfolios have been sold at significantly below the face value of the loans. Investors have the potential to make a significant mark-up on their purchases. According to industry figures, some of the portfolios have been sold for as little as 15-17 cents on the euro.
Mr. Moran said, “You get a discount for putting cash on the table now and hope that the market will increase in value or add value through other strategies.
“That has been the preserve of international buyers, where there has been no domestic involvement.”
Industry figures point to lack of supply as being the biggest problem in the commercial property arket right now, saying that there is not enough supply to meet demands of prospective investors.
DTZ Sherry FitzGerald investments director Michelle Jackson said, “There’s very little by way of commercial properties for sale.
“There has been about €400 million so far this year in asset sales but we’ve probably had a multiple of 10 trying to buy that.
“It’s for lots of different reasons. Maybe people are hoping pricing will continue to improve and holding out is seen as a good strategy.”
She concluded by saying that she expects the majority of sales to take place in the last quarter of the year.
