Investment in commercial real estate rebounded in second quarter

That was almost three times the €162m invested in the first three months of the year, with the activity being spread across a number of sectors and notable sales in retail, office, healthcare residential and industrial markets.

The largest deal was the off-market sale of a large rental apartment development in Malahide in north Dublin for €70m.

Colin Richardson, research director at CBRE Ireland, reported an uptick in investor demand for established private rented apartment investments and student housing and expects more of those over the rest of the year. Among those believed to be ‘sale agreed’ is the Scape student housing scheme off Grafton Street for which Cushman was quoting €80m.

“For the second consecutive quarter, the retail sector attracted the most capital in the Irish market accounting for 30pc of quarterly spend,” Mr Richardson added.

With French investors continuing to avail of relatively generous yields of over 7pc, Corum AM bought Mahon Point Retail Park in Cork for about €50m from the Irish fund IPUT at around that yield level. IPUT is believed to have paid €56m for Mahon Point in 2019 and in the meantime has benefitted from its rent roll.

A private Irish investor bought two regional retail parks for about €41m from international investor Davidson Kempner.

The largest office deal of the quarter was the HSE buying the Elm Park Green Portfolio near St Vincent’s Hospital in south Dublin for about €50m from Starwood Capital. The 319,000 sq ft of space will allow the new National Maternity Hospital to be developed on the campus.

In what was the sale of the first truly ‘core’ Dublin office since 2022, State Street Global Advisors sold 40 Molesworth Street to Deka Immobilien for just under €40m. This former European Commission office includes a Specsavers outlet which fronts onto Dawson St. These deals helped boost the office market share to nearly 25pc in Q2.

Mr Richardson said: “While real-estate investment markets continue to face the challenge of higher capital costs and ongoing price discovery in some segments of the market, the interest -rate cut by the ECB in June, and the expectation for further cuts in the second half of the year, along with a narrowing of the spread between vendor and purchaser price expectations, has led to more liquidity in Q2.

"CBRE has visibility on several large-scale sales that should close, across a variety of sectors. Hence, despite the generally negative sentiment around pockets of the commercial real estate market, it appears the market troughed in Q1, and investor interest and transactional activity should continue to improve from here.”