Demand for residential investment opportunities in Ireland continued at pace throughout 2019 with a record of almost €2.4 billion transacted in the year - more than double the volume of activity in 2018. 2019 spend was boosted by seven multifamily transactions that extended to more €100 million in value compared to four transactions of this magnitude during 2018.
Over 170 residential investment transactions extending to more than €1 million have been completed in Ireland since multifamily first emerged in 2012, amounting to a total spend of over €5 billion between them. Almost half of the total volume traded since 2012 occurred in 2019.
Compared to 3 transactions in 2012, there were 48 residential investment transactions recorded in the Irish market during 2019.
47% of residential investment transactions in the Irish market during 2019 comprised forward-commit transactions with the remaining 53% comprising standing stock trades. This is a similar split to 2018.
Residential investment transactions accounted for 33% of total investment spend in the Irish market during 2019, second only to the office sector, which accounted for 51% of the total €7.2 billion of investment spend in the year.
There has been a notable increase in planning applications to develop apartment schemes year-on-year, with planning permission in place for 5,656 apartment units in Q3 2019, compared with 3,139 units in the same period in 2018 - an increase of more than 80% year-on-year.
Recent transactions, including several forward-commit deals, brought the total number of residential units under institutional ownership in Ireland to approximately 14,500, with IRES REIT plc now the largest institutional landlord.
Prime yields for multifamily investment opportunities in the Irish market are currently in the order of 3.75%, having compressed during the last quarter of 2019. Yields are likely to compress further during 2020 unless there is further Government interventionin the sector in the form of rent control.