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Approximately €1.39bn transacts in Development Land Market in 2018

Dublin, March 20th , 2018

2018 was a remarkable year for the development land market. Cushman & Wakefield Research can reveal that approximately €1.39bn transacted across the Greater Dublin Area (GDA), Cork, Galway and Limerick within the year, almost double that of 2017. This was the greatest value that transacted since the peak of the market more than a decade ago.

2018 was a remarkable year for the development land market. Cushman & Wakefield Research can reveal that approximately €1.39bn transacted across the Greater Dublin Area (GDA), Cork, Galway and Limerick within the year, almost double that of 2017. This was the greatest value that transacted since the peak of the market more than a decade ago.

Commenting on the development land market, Head of Development Land, Donal Kellegher of Cushman & Wakefield said "In 2018, some of the biggest remaining residential land banks and mixed-use projects under asset management in the NAMA portfolio were sold, which resulted in the strongest land sale volumes in the past 10 years. The market for the best sites and projects remains strong from well-resourced developers and their funders, underpinned by clear residential and commercial end user demand. The Private Rented Residential Sector (PRS) is continuing to mature and is proving to be a key driver in the demand and pricing of some development lands"

Overall, 2018 saw an enormous 90% year-on-year improvement in the total value transacted across the four major development land markets. The GDA alone saw almost €1.25bn transact, a 96% growth year-on-year, with several high-profile transactions occurring. Most notable of these were the sales of two of the few remaining prime sites within Dublin’s docklands. The transaction of City Block 9 and City Block 3, for approximately €180m and €113m respectively, represented the two largest development land deals in 2018.

Large-scale deals became a much more prominent feature of the market in 2018, with twenty deals transacting for €15m or more, or 68% of the total value. In comparison, 2017 saw just eight deals transact within that price range. This increase in large scale deals reflects the better quality of stock that came up for sale in the year, but also mounting demand within the marketplace.

On the back of a number of years of sustained house price growth, the Help to Buy scheme, increasing viability and an intense demand for housing, the residential sector comprised the majority of investment into the development land market in 2018. Approximately €928m, or 67% of the value transacted, was spent on sites primarily to be used for residential purposes.

Although the GDA saw the bulk of activity, making up 90% of the value that transacted in the four markets, Cork also noted a vast improvement in the year. In excess of €105m traded in Cork last year, a 91% jump on 2017. The sale of the Live at the Marquee site and the Maryborough Ridge sites, both to Glenveagh, for a combined value in the region of €40m, were among the most notable deals of the year. Robust demand for both residential and commercial property has helped stimulate the vast improvement witnessed in the market.

While the development land markets in Galway and Limerick saw a slightly steadier and less vibrant year than either Cork or Dublin, both markets did close 2018 quite strongly. Demand was buoyant in both regions in the year, however the limited availability of stock restrained transaction activity. In spite of this dearth in quality new supply, Quarter four was the strongest quarter for both Galway and Limerick in over four years, with approximately €16m worth of sales closing across the combined markets. In addition, a number of significant deals remained sale agreed in both regions at the close of the year, meaning this strong momentum should continue into 2019.

About Cushman & Wakefield

Cushman & Wakefield is a leading global real estate services firm that helps clients transform the way people work, shop, and live. Our 43,000 employees in more than 60 countries help investors optimize the value of their real estate by combining our global perspective and deep local knowledge with an impressive platform of real estate solutions. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $5 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

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