Land in prime areas with planning permission in place is attracting strong bidding across sectors, according to Savills.

The estate agent said that even sites without planning permission have performed well if they are sufficiently well-located.

Savills tallied €648m worth of land deals transacted in 2021, representing growth of 11% compared to the previous year’s total of €585m.

Residential made up the majority of development land sales at 59% of market turnover, slightly higher than the five-year average of 53%.

John Swarbrigg, director of development agency and consultancy, commented: “There are c.€450m in deals either currently sale agreed or being marketed. This significant level of deal flow highlights the depth of demand for sites and suggests that 2022 will be another robust year.

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“The strength of the industrial and logistics investment market is likely to filter through to the development land market.”

Swarbrigg added that with the new Large-scale Residential Development (LRD) process now signed into law, the industry is hoping that it will prove successful where the Strategic Housing Development process failed.

He noted: “The increase in speed and clarity emphasised in the LRD process has been welcomed. However, its success will be dependent on the resourcing of local authorities.

“If mismanaged, it could result in the continued use of judicial courts for planning decisions, slowing the planning process and resulting in another missed opportunity to help improve the delivery of residential units.”

Savills also observed that the draft county development plan process underway across a number of counties has highlighted differing approaches to planning policy, causing considerable uncertainty for developers.

According to a Savills report, the most pressing proposals are presenting in the build-to rent-sector, either by mandating a minimum ‘for sale’ share of any apartment development, or by requiring minimum amenity and storage provisions that would render schemes unviable.

“The lengthy period of the process also adds to the uncertainty, adding another layer of planning doubts to an already difficult environment to navigate.”

Savills also cautioned that the Central Bank has added to developer uncertainty with proposals to limit leverage on Irish domiciled real estate funds to 50% of the fund’s value.

“The proposals may limit the number of international funders in the residential development land market as their business model would no longer work here."

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