Development land market generates €204m in sales in the first quarter

The former Jurys Hotel site in Ballsbridge, Dublin, was acquired by the US embassy for €152m

Donal Buckley

The total value of development land that transacted in the Greater Dublin Area and three regional centres of Cork, Galway and Limerick totalled €204m for the first quarter of 2024, according to the latest report on the development land market from Sherry FitzGerald.

While considerably greater than the same period in 2023, this largely reflects a single transaction: the sale of the former Jurys Hotel site in Ballsbridge. This 4.23-acre site was acquired by the US embassy for €152m and accounted for three quarters of total turnover during the period, and is the second highest development land sale witnessed since records began in 2015.

Excluding this transaction, the value of turnover was €52m which was the lowest level recorded since the second quarter of 2020 and well below the long-term average. The corresponding quarter of 2023 saw €61m worth of deals.

A total of 20 land sales closed during the first quarter of this year, compared with 16 transactions for the corresponding period of 2023. Smaller sized transactions dominated activity during the quarter, with 80pc less than €1m in value. Similarly, the majority of sites that traded during the first three months of the year, 80pc, were less than five acres in size.

The agency blames increased construction costs and interest rates for hindering land deals during the opening months of the year. However, it expects that a reduction in interest rates expected in June should see transaction activity strengthen as the year progresses.

A separate report from CBRE says residential sites accounted for as many as 90pc of first quarter sales. It says the state continues to be active and that several larger and smaller private Irish developers also acquired sites. It adds that the sale of some notable largescale landbanks suitable for residential development are currently in the process of closing or have just been launched to the market.

Jean Behan of Sherry FitzGerald says the number of sites which were sale-agreed at the end of the quarter amounted to €350m.

“Furthermore, demand for residential development land remains particularly strong, while shortages of zoned land, and sites with viable planning permission are becoming more apparent,” she adds.

Colin Richardson of CBRE says retail and office sectors will provide residential development sites over time.