Irish land sales totalled approximately €99 million in the second quarter of 2021, bringing the total year-to-date turnover to €193 million, according to new data from property advisor Savills Ireland.
This represents an increase of 15 per cent on the same period in 2020, when turnover reached €167 million.
Looking ahead, Savills expect to see several large deals sign by the end of the year, which will drive turnover higher in the final half of 2021.
The market for commercially zoned land remains strong, with Savills reporting high levels of interest in the former City Arts site on Dublin’s City Quay (1-6 City Quay).
The site, which extends to approximately 0.55 acres, has the potential to accommodate an office development of approximately 142,000 square feet, subject to planning permission. The site was offered for sale with a guide price of €35 million, with a number of bids received well in excess of the guide price.
Funding sources
As part of this process, Savills also witnessed a number of new funding sources entering into the market, most notably from the UK and the Middle East.
The largest deal of the quarter was an off-market sale in South Dublin, representing a €15 million trade. Another notable transaction was the sale of an 11-acre site on Glenamuck Road, Dublin 18, which traded for €10.5 million. The site has full planning permission, granted by An Bord Pleanála in 2020 for a Strategic Housing Development of 197 residential units.
This follows on from a deal for a 33-acre site on Glenamuck Road in Q4 2020, which sold for approximately €20 million. There is a third site of approximately 7.5 acres in the area, which has just gone sale agreed.
Another notable sale in the quarter was the M3 Gateway Lands site in Co Meath, reportedly traded at a price in excess of €10 million.
This is an industrial site with the potential for a logistics/distribution hub or data centre. There is currently a dearth of suitable logistics space in Dublin with industrial and logistics space in the capital having a vacancy rate of just 1.2 per cent. This could lead to an increase in demand for greenfield sites with industrial related zoning around the capital in future quarters.
Residential market
John Swarbrigg, director of Development Land at Savills Ireland, said: “With strong activity in the residential market in the first half of 2021, it is unsurprising that the majority of the land sold had residential related zoning. Indeed, it is likely that the strong growth in house prices helped to drive demand for residentially zoned land. In total, we estimate that residential zone land sales accounted for more than 75 per cent of total sales volumes.”
Mr Swarbrigg added: “Sites with planning permission have risen in priority in recent years, primarily due to the fact that almost one in three planning permissions under the SHD process are now going to judicial review. It is promising that the government has finally recognised the inadequacy of the Strategic Housing Development planning application system, however, in the interim certain financiers — and by extension developers — are unwilling to take on planning risk until we have more clarity on the matter. Land with full planning permission has always traded at a premium, but in recent years we have seen this gap widen.”
