It was a relatively quiet opening quarter for the development land market with approximately €132m transacting in the Greater Dublin Area (GDA), and the regional centres of Cork, Galway and Limerick. This represents a marginal 3% increase on the comparable quarter in 2017.
Commenting on the market Marian Finnegan, Chief Economist, Cushman & Wakefield said, “The opening months of 2018 were disappointing for the development land market. Despite the strength of demand for both residential and commercial development land, the supply of land coming to the market was very low resulting in low activity levels, most notably in the regional centres. That said, an analysis of land sale agreed at the end of the quarter does point to some improvement in activity in the months ahead.
Activity was relatively robust in the GDA with a total of 39 deals closing for a combined value of €127m. While signifying a 33% upturn on the total value transacted year on year, this is more reflective of a particularly quiet opening quarter in 2017. The largest deals in the quarter were the sale of 1-3 East Road which sold for in excess of €40m and the sale of a 0.87-acre site at Abbey Street Upper, adjacent to Jervis Luas Stop in Dublin 1, for an approximate €22m.
Two other deals of note in the quarter were Boston Sidings, Dublin 1, and Aikens Village, Stepaside, Dublin 18, which were both sold under license agreement. Boston Sidings, which is believed to has a real value in excess of €30m, is a 0.87-acre site that fronts the Grand Canal Quay, while Aiken Village comprises a 3.75-acre site which has full planning permission for 61 residential units.
The appetite for both commercial and residential development is strong at present, however the availability of sites to deliver on this demand remains a challenge. A total of 30 new sites were brought to the market in the quarter in the GDA. Notably, only 10 of these had planning permission, and when combined have the capacity to deliver 480 new residential units. On a positive note, an estimated €200m worth of development land was sale agreed at the end of quarter one, which points to a greater level of activity in the months ahead.
Outside of the GDA, activity was particularly sluggish at the start of the year, with transaction values and volumes substantially down. Cork only saw four transactions completing between January and March of this year for a combined total of approximately €2m. In comparison, the equivalent period in 2017 saw 19 deals close for a combined value of in excess of €19m.
Mirroring the GDA, activity in the Cork development land market is expected to improve significantly as the year progresses. By the end of the quarter, in excess of €11m worth of sites were sale agreed. In addition, a number of high profile sites, including 78.5 acres located at the Former Golf & Country Club in Carraigaline, were made available in quarter one, and should serve to bolster the market this year.
Activity in the development land markets in Galway and Limerick was also quite restrained during the three-month interval. Both counties saw very few deals transact on the open market in the quarter, however a number did occur off market. The availability of prime residential sites remains a persisting issue in both regions. This inactivity in the transaction of sites, which can supply large scale housing developments, has been a contributing factor to the high levels of price inflation for residential properties currently experienced in both Galway and Limerick.
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Communications Director, Cushman & Wakefield Ireland
Tel: +353 86 252 3277
For Further Information Contact:
Director, Head of Development Land
+353 (0)1 639 9248