The Viability of Irish Investment Opportunities

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Different than the 90’s and the early 2000’s, the individual sales market, private owner occupiers and small investors are not very viable for apartment schemes of scale; They are not very bankable either. In the recent climate, there is naturally an aversion to higher risk strategies and an unwillingness for developers to enter into these agreements. There is also opposition for funders to be able to proceed with projects without a clear exit strategy. A large number of stakeholders are looking to PRS and social housing development opportunities for their sites. This happened to be the case prior to the pandemic, and now ever more so.

The social sector generally has smaller lot sizes than the PRS sector. As planning permissions come through the system, it has led to more opportunities with varying levels of build-to-rent characteristics.All these things are being shown to investors in the sector of investment. The number of these opportunities being offered has increased substantially, and it is looking to continue like this in the near future. Due to the challenges in the industry stemming from funding and scale, it is expected that only a relatively small number of planned developments are likely to make it to site and to practical completion.

In the current market the value is in the delivery of projects, turning the bare resource of land into a finished development. The delivery team has been seen as the critical part of the offering, and the delivery timeline is very important. Underwriting projects by reputable developers is going to attract debt and equity investment over the next few years.

Long-term sustainable income with attractive yields is being desired by people all over the world. There are increasing capital allocations toward the living sectors globally and within the European Union. The right conditions for investment in Ireland remain, which includes positive national policing. With the optimism for investing, it is looking like there will be a continued development of the multi-family investment sector. Based on recent discussion with leaders in the capital markets and investors, there is a strong need to invest in the wider Dublin market. Investors need to be aware of current market conditions to find what investment best suits their needs for making money. It will be interesting to see how investors react to changes in economic policy, especially due to the recent news of vaccinations. However, Irish investment is looking like it is going to be very profitable in the next few years.

Written by John Spurrier, Mortgage Analyst for Online Application