Ireland's investment property market showed significant improvement in the first quarter as transactions grew more than threefold year-on-year, according to Savills Ireland.
Transactions completed during the first three months of 2025 were valued at €542.5m. The four-quarter moving average of €2.9bn was the highest recorded since Q2 2023.
There were 25 deals completed during the quarter, 28% below the five-year average, and the average deal value was €21.7m.
Looking back, Savills said that the first quarter of 2024 appears to be the nadir of the investment market, although there remains "considerable distance to go" before the market achieves liquidity similar to 2022 when interest rates were first raised by the European Central Bank after more than a decade of stability.
The largest deal of the quarter was the €220m acquisition of Oaktree's retail parks portfolio by Realty Income, which represented 40% of the market in Q1.
The portfolio comprises eight retail parks including Sligo Retail Park and Waterford Retail Park, and the sale translated to a 7.3% net initial yield.
The sale ensured that the value of deals for investment properties located outside Dublin was large than the value of deals for those inside Dublin (54%:46%).
The second-largest deal was the purchase of the Ruby Molly Hotel in Dublin 1 by Deka from ESR Europe for €86m, representing a yield of 5%.
The third-largest deal was the sale of Central Quay, an office building located in the south docklands, by Hibernia to French SCPI fund Atland Voisin for €42m, equating to a yield of 6.8%, or 7.5% including the short-term fit-out rent.
The fourth-largest deal of the quarter was the sale of two office blocks for €30m – representing a yield of 12.7% - at Swift Square in Santry, Dublin 9.
The assets were purchased by Camgill Conway, with one office fully let to the ESB and the other with a short weighted average unexpired lease term across nine tenancies.
Two healthcare-related deals accounted for €41.25m, namely Primary Health Properties €22m acquisition of property in Little Island in Cork, and the purchase of four nursing homes by an overseas buyer for €19.25m.
Retail accounted for half (50%) of the market, thanks to the retail park deals and Ronan Group's acquisition of two of its receivership properties on Grafton Street (PTSB and Bewley's).
Office properties made up 15% of total volumes, compared to an average of 29% over the past five years.
Institutional buyers held the largest market share at 69%, driven by favourable income returns and potential for future yield improvement.
"The notable increase in investment volumes this quarter reflects a strengthening investor confidence in Ireland’s commercial property market," said Kevin McMahon, director of investments at Savills Ireland.
"The performance of retail and hotel sectors, in particular, underscores international interest due to attractive yields and solid fundamentals. While challenges remain, the market shows signs of stabilisation and gradual recovery."
(Pic: Getty Images)
