Sites worth more than €800m are sold in first nine months

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As much as €400m was generated from 19 development land deals in the third quarter of this year according to estate agents Lisney.

Meanwhile CBRE estimates the first nine months of the year saw more than €800m of development land sold in 47 transactions.

Separately, president of the Society of Chartered Surveyors Ireland Johanna Gill told the organisation's annual conference yesterday this sector of the market "has been increasing in value by double digit figures for several years. We estimate the land costs of a new three-bed-semi is €60k or around 20pc of the total cost."

On the other hand Lisney's report says that as off-market transactions continue to be an important feature of the market, land prices are stabilising and land vendors are adjusting their price expectations.

Lisney director Ross Shorten points out the volume of transactions in the third quarter of this year was 32pc lower when compared with Q3 2018, however the value of deals is higher.

"Most of the land coming to the market and transacting at present comprises smaller sized infill sites.

"Premium payments are being achieved for sites with planning permission that have a low-risk route to delivery and exit," he adds.

Among the biggest development land deals this year was Technological University Dublin's sale of its Kevin Street campus in the south city centre for €140m to a team led by Dublin firm Westridge Real Estate.

Selling agent Knight Frank had been guiding €80 million for the 3.57 acre site. It is expected to be developed for a mix of office, retail and residential uses.

One of the factors influencing the development land market is the willingness of investors to forward commit to build-to-rent residential schemes in order to secure product in the absence of sufficient standing stock to satisfy investor appetite, according to Marie Hunt of CBRE.

"However, investors want access to product that is deliverable in the short to medium term as opposed to committing to schemes that are too early in the development or planning process.

"There is increasing concern about rising build cost inflation, which can have a significant impact on deliverability and ultimately target returns. Developers with a contracting arm will undoubtedly be best placed to ensure deliverability," she adds.

Nevertheless Mr Shorten points out that speculative land purchases without planning are still occurring for well-located residential sites. He sees the €10m plus category of the market remaining attractive to international firms, usually in conjunction with an Irish development partner.

Transactions above €10m accounted for 42pc of the volume of sales in Q3 and when all sales are combined, accounted for 90pc of total market turnover.

About one in every five sites sold in Q3 were in the €5m-€10m price range. Transaction volumes in the sub-€5m bracket were stronger, accounting for 37pc of transactions as demand for smaller infill sites continued driven mainly by domestic developers.

Mr Shorten expects this to continue in the final quarter of the year.

Another of the most notable land sales in Q3 2019 included Lone Star's purchase of 120 acres at Cherrywood in South Dublin for more than €120m from investment firms Hines and King Street Capital.

While it was previously suggested 2,600 houses and apartments could be built across the two plots involved, Lone Star's subsidiary Quintain is expected to seek to develop as many as 3,000 units.

At Taylor's Lane in Ballyboden, Dublin 16, an 8.6-acre site that can accommodate 436 units sold for about €20m. Agents GVA Donal O Buachalla had been guiding €18m.

Among the sites that had gone sale agreed by the end of September was an eight-acre site at Gort Muire, Ballinteer, Dublin 14, for around €35m. The 'Irish Times' reported house builder Lioncor Developments had agreed a deal with agents Bannon acting on behalf of the vendor the Carmelite order. While the site did not have planning permission, a feasibility study indicated it could accommodate more than 400 apartments.

Meanwhile developer Marlet has sold three sizeable sites, two of which were bought by Tristan Capital Partners for a combined €54.5m. The latter two have permission for 663 new homes, suggesting an average of €82,200 per unit site.

One of these is a 9.63-acre site in Cabra, Dublin 7, with planning permission for 420 new home.

The second is a 7.2-acre site at Aiken's Village, Sandyford, Dublin 18, with permission for 243 new units.

Its third lot, comprising 6.55 acres at Carriglea, Bluebell, Dublin 12, with planning for 358 apartments went sale agreed for €12m.

Meanwhile demand for industrial-zoned land also "remains positive" with Lisney reporting some large sites in north Dublin changed hands off-market.

IPUT's recent purchase of about 32 acres at Kilshane is expected to see a new industrial park being developed adjacent to the Rohan developed Dublin Airport Logistics Park.

Large sites also went sale agreed at Abbottstown and the Naas Road.

 

This article was first seen on https://www.independent.ie/business/commercial-property/sites-worth-more-than-800m-are-sold-in-first-nine-months-38668585.html

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