Elkstone Real Estate – Monthly Update August 2018
In the last month, we’ve closed on the purchase of a half acre site in Christchurch, Dublin 8 and are preparing to lodge a planning application for an aparthotel in the coming weeks. We also arranged a loan for the purchase of a site in Blackhall Place, on which the promoter will seek planning permission for a residential development. In the coming weeks we expect to complete the purchase of a development in the south-east of Ireland and a PRS site in central Dublin. We are also considering a mixed use development in central Dublin.
Padraig Owens is a Real Estate professional and co-founder of Elkstone Partners
Elkstone Real Estate Market Update
Take-up of office space in Dublin remains very strong with JLL reporting Q1 2018 takeup at 61% higher than the same period in 2017. The city centre vacancy rate is now slightly above 5%. We’re also seeing a big increase in activity outside Dublin, particularly Galway and Cork. While take-up of industrial space in Q1 2018 was slightly lower in Dublin than Q4 2017, JLL report it is 40% higher than Q1 2017. The interesting trend is the increasing number of smaller units (below 10,000 sq ft) making up these figures.
Dublin retail continues to trend upwards, despite negative undertones as a result of online disruption. CBRE report greater demand in some sub-sectors, including food and beverage. Generally, the rest of the country lags behind Dublin, but there are encouraging signs in some locations.
DNG report house price growth trending towards single digits in 2018, a more sustainable level than recent years, while average Dublin prices remain 37% below 2006 peak prices. Commentators appear to disagree on the number of houses being built, but all agree that it remains insufficient to meet demand.
International Real Estate Market Update – Germany
While Ireland remains a very attractive location for real estate investment, a number of our clients, including our Irish clients , have invested in other jurisdictions. Germany is often considered a good location due to its strong, stable economy. The German economy continues to surge and real estate has benefited, particularly the office and logistics sectors.
Prime office yields have tightened considerably and for this reason we like the opportunities presented just outside core locations. Office stock is often tenanted by domestic “Mittlestand” companies, offering strong covenants. This is a space that requires a good local partner, which is why we work with NAS Real Estate, a family-office fund based in Berlin and Frankfurt.
Elkstone Real Estate Articles of Interest
This month’s feature article from CBRE provides a good orientation of the German real estate market in 2018. As well as identifying important trends within existing real estate sectors, it also includes a section, identifying the disruptive forces shaping the future of European Real Estate. Four German cities have consistently ranked among the top six locations for real estate investment in this annual report. A number of our clients have recently invested in German real estate through our partnership with NAS-Invest, a Berlin based family office.
The second document is an overview of the NAS Office Fund –Read document here.