It's been a frustrating year in the Irish property investment market. Despite the snow, the year started optimistically with rumours of many overseas investors circling. However, whilst sentiment appeared to be building, there was little action occurring. The market received a lift when German fund, GLL, acquired the AIB branch on Grafton Street on a sale and leaseback basis before the summer.
The summer however brought further bad news about the Irish banks, with drastic figures about the write down in Anglo being bandied about. This had a serious detrimental effect on Ireland Inc. Foreign investors became jittery. By the end of the summer, with confidence low, we were back to square one. We had to build from the back again.In September, O'Neill Strategic Property Advice concluded the acquisition on a sale and leaseback basis of Eircom's Network Management Centre on behalf of London based London and Regional Properties. In the Autumn, announcements by the Government in relation to the banks and the forthcoming budgets appeared to have calmed foreign investor nerves. Once again they started investigating the Irish market, all looking for investments with no risk (in effect, long term income from secure tenants in good locations). Given the demand for this type of investment, values started to consolidate and, in some instances, increased. Secondary investments were not in demand and hence values in this sector will remain under pressure.
Recent events however have frightened foreign investors who have retreated once again to adopt a wait and see attitude. Their interest is constantly swayed by perceptions about Ireland and it's place in the Euro. The next few months will be critical.
Expect further Jitters and more snow!!
