Irish Development Land Market records €400m for first half of 2024
Paul Nalty • 09/07/2024
When compared to the same period last year, overall development land spend far exceeds the €130m reported in 2023 H1. This is largely due to a couple ‘megadeals’ completing so far, with the volume of deals somewhat comparable to this time last year. With NAMA having sold off a large proportion of their landbank and now seeking to develop out a most of their remaining assets, it’s unlikely the market will reach the heights of 2018 and 2019, where the overall value of development land trades exceeded €1bn.
The largest transaction of the year so far was the US Embassy’s purchase of Former Jurys Inn Hotel Site at Ballsbridge, Dublin 4. Joe O’Reilly’s Chartered Land disposed of the property in an off-market deal earlier this year for a reported €145m and this is expected to be the largest land deal for 2024. Cairn Homes completed the largest deal for the second quarter of 2024, with their off-market acquisition of Cannon Kirk’s site in Donabate, Co. Dublin for a reported €5m The site extends to just over 70 acres and had recently received planning permission for the development of 1,020 units.
Residential land trades have largely dominated the Irish Development market and Northern Irish Developer Lagan Homes have completed two of the more notable deals this year. The first one being the sale of 25 acres of zoned land at Ballycullen, Co. Dublin for €16m and the second being a shovel ready site at Southgreen, Kildare Town for around €8m, which includes planning permission for 168 no. units.
While housing led sites are particularly in high demand, several small to medium lot sizes with the benefit of full planning permission for high density residential schemes have also taken place within the market. These sales are mostly fuelled by the urgent requirement for further social and affordable homes via purchases of the completed units from Approved Housing Bodies. With the government coming under pressure to increase the housing output for the coming years, this is a trend expected to continue.
As public bodies have become exit partners for several developers across Ireland, their interest in the purchase of development land has also ramped up. DLRD completed the acquisition of c. 10 acres in Brennanstown for €10.75m while the remaining 18 acres are due to close later in the year for around €5m to the same Local Authority.
It’s also been reported that the LDA are in advanced discussions to purchase two high profile development sites in Dublin. The first being the Royal Liver Retail Park situated along the Naas Road, which includes planning for over 1,000 units plus other commercial uses. The second is Richmond Home’s 125-acre landbank in Baldoyle, which has consent for around 1,800 units. These deals will be in addition to the Clongriffin site acquisition which completed at the end of 2023, where they will be delivering around 1,800 units over the coming years.
On the commercial land front, the lack of industrial and logistics development opportunities becoming available has led all time low vacancies and a significant rise in prime headline rents. As a result, many of the stakeholders within this industry are calling for the further zoning of land around the Greater Dublin Area to meet this pent-up demand. Developers seeking hotel opportunities around the Ireland’s major city centres has increased exponentially on the back thriving tourism market. However, purchasers are now less likely to take on planning risk here, with many of local authorities favouring residential use over hotel. Town centre and neighbourhood sites in growing areas are also continuing to perform strongly, with all the major grocers seeking further retail development opportunities nationwide.
Commenting on the Development Land market, Paul Nalty, Associate Director, Development Land, Cushman & Wakefield, said
“The Irish Development Land market is in rude health on the back of strong end user demand for most sectors, but particularly for land suited to new residential product. While the market has largely welcomed the influx of capital from the Irish Government, predominantly through forward purchases and state backed initiatives, the decline of institutional and private funding needs to be addressed. Further changes to housing policy will be key if we’re to entice international investment back into Irish housing, which can then create a diverse development land market that delivers a balanced amount of units to both the social/affordable and private market.”
“While momentum is starting to gather in the acquisition of residential zoned land, further certainty needs to be implemented within Irish planning and this can hopefully be largely resolved with the incoming Planning and Development Bill, due for final publication this year. The absence of suitable sites in the market will likely resolve itself once the planning system begins to unclog and RZLT becomes a reality in 2025.”
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