https://bannon.ie/wp-content/uploads/Bannon-Investment-Pulse-2023-1.png 3508 2480 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2024-01-12 16:19:182024-01-12 16:20:22Investment Pulse 2023
2023 was very much “annus horribilis” in terms of capital market’s activity. Concluding with a total turnover of €1.85 billion it represents the lowest level of activity since 2012. Clearly the pricing uncertainty brought about by the ending of the free money era, driven by a multitude of geopolitical and economic factors, has had the biggest effect.
See our latest Capital Markets report with analysis of both the past quarter and the year as a whole plus insight from our Capital Markets Director Roderick Nowlan.
To view the full report, please click here.
https://bannon.ie/wp-content/uploads/./processed-864918BC-D514-4AE7-ADEF-D60FF5B50FC7-8120B062-CE18-45F0-9A18-244CDE79FACA-scaled.jpeg 2560 1744 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-10-17 09:59:102023-10-17 10:03:21Navigating the Transition: From Final Year Student to Graduate Surveyor
In early September I had the privilege of joining Bannon as a Graduate Surveyor. Having completed my internship in Bannon in third and fourth year as part of my Property Economics degree I was already familiar with the office setting and the familiar faces. The positive and friendly atmosphere made this transition seamless. Starting any job can be daunting but I have felt that in Bannon they have been very supportive in every way to help me settle into professional life.
I joined the Capital Markets and Office teams working alongside Rod Nowlan, Lucy Connolly and Julia Halpenny. Having previously worked in this area during my internship I was aware of the fast-paced industry of the investment world. From shopping centres to Georgian offices, I was well exposed to the different avenues of the property industry as well as gaining invaluable experience from my colleagues. It was very satisfying applying theory to practise moving from college to the working world as well as meeting new faces along the way and learning from their past experience.
Throughout my final year of college, I was always supported by my colleagues in Bannon who helped me throughout the year with advice for my thesis and various projects, their support was very reassuring in what proved to be a very stressful academic year. This help has been very much continued as I move into the next stage of my career as I have been assured that if I need anything, they are always there to guide me.
The positive culture in Bannon as well as the friendly and intelligent professionals that work here have definitely played a part in developing my growing knowledge of the property industry as well as helping build my character as a person. I am very grateful to Bannon for the opportunity and I look forward to continuing to work with the great Bannon team!
Author: Brian Morton, Graduate Surveyor, Bannon
Date: 17th October 2023
https://bannon.ie/wp-content/uploads/./Bannon-Investment-Pulse-Q3-2023-re-1.png 3508 2480 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-10-09 10:03:282023-10-09 10:05:17Investment Pulse Q3 2023
There were two key takeaways from this quarter’s Capital Markets figures. First and foremost, for the first time in almost a decade there were no material PRS transactions. The second was that two purchasers, specifically Davys and French Fund Corum, accounted for almost 50% of the entire quarter’s market turnover with the acquisition of 10 separate assets.
To view the full report, please click here.
https://bannon.ie/wp-content/uploads/./IT.jpg 609 912 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-07-20 10:18:202023-07-20 10:18:50Retail parks, shopping centres and quality streets prove to be the biggest draw for investors
The second quarter proved to be a challenging period for the Irish capital markets sector, with a total value of only €333 million invested. This marks the weakest performing quarter (and half year at sub €1 billion) in the last six years.
This lacklustre landscape can be attributed to three key factors: the end of “free money” as interest rates rise and inflation runs rife, the post-Covid impact of remote and hybrid working on office space demand, and concerns surrounding necessary capital expenditures for ESG (environmental, social and governance) retrofitting amidst rising construction costs.
However, after years in purgatory, it is the retail sector that has emerged as the star performer this quarter, accounting for 38.7 per cent of turnover. Although this performance is partly supported by the downturn in other sectors, there is no doubt that a significant perception shift has occurred, particularly in the retail park segment.
Notably, six retail parks have traded this quarter alone amounting to approximately €116 million including Liffey Valley B&Q, City East, Blackwater, Carlow, Newbridge and Waterford.
The most high-profile of these, Liffey Valley B&Q, which traded to French fund Inter-Gestion REIM for €26.6m, has thrown off a particularly strong equivalent yield in the mid to late 5 per cent range for an asset with a lease that has less than four years to run. This process saw participants such as Realty, Corum and Iroko compete for the asset.
So, what has driven this remarkable change in fortunes?
The “newfound” popularity of the retail sector can be attributed to a slow but building appreciation for what have been long-standing dynamics in both the supply and demand side of the sector. These dynamics differ considerably from the UK and US markets, where Irish retail investor sentiment used to originate.
Unsurprisingly, that core of the demand has shifted to both domestic family offices and a more central European focus where an appreciation for the fundamentals has shown through.
Since 2011, when the last new shopping centre was completed in Ireland, there has been minimal net additional retail supply. This stands in stark contrast to the substantial expansion witnessed in the office, residential, and industrial sectors.
However, during this period, the number of people employed in Ireland has surged by 37 per cent, retail sales volumes have increased by 38 per cent, and Irish households’ net worth has reached new heights. These are all factors which feed the fundamental sustainability of the retail sector.
When considering the cumulative impact of debt reduction, increased savings, and rising house prices, Irish households are wealthier than ever before, with a net worth surpassing €1 trillion for the first time.
This surpasses the 2007 peak level of €716 billion, which was actually exceeded in the final quarter of 2017. Furthermore, Ireland’s gross debt-to-household income ratio has transitioned from over 200 per cent of the European average in 2011 to being below that European average today.
Combining these fundamentals with the historical correlation between inflation and the growth of retail rents and values, the renewed interest in the sector becomes apparent.
As highlighted by the turnover statistics, retail parks, in particular offer a compelling proposition. They benefit disproportionately from household growth and have proven resilient during economic downturns and the challenges posed by Covid-19.
Additionally, their ability to meet ESG requirements through initiatives like PV panels, rainwater collection, and other environmental measures adds value and attracts investors including new entrants. Similar attributes for high-street properties and grocery-led necessity retail are likely to see further interest in these sectors.
We expect to see numerous quality high-street trades in the third quarter and generally as the environmental benefits of the “centralised-distribution model” reflected by retail warehouses, shopping centres and Ireland’s key high streets becomes apparent.
We are seeing a complete return to pre-Covid footfalls for most the of the regional and necessity-focused schemes with Dublin’s two high streets hitting pre-Covid weekly footfall levels again for the first time last month.
As a consequence, we expect the sector to continue to outperform for the coming quarters with no less than seven shopping centres amounting to over €100 million in value due to trade within the next few weeks.
Rod Nowlan is an executive director at Bannon and heads up its office and capital markets team
https://bannon.ie/wp-content/uploads/./Dublin-Investment-Market-Q2-2023-Snapshot.jpg 1317 2517 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-07-04 15:42:482023-07-04 16:50:13Investment Pulse Q2 2023
This quarter proved to be a challenging period for the Irish Capital Markets sector, with a total value of only €333m. Q2 marks one of the worst performing quarters in the last six years. On a positive note, after years in purgatory, the retail sector has emerged as the star performer for the period, accounting for 38% of turnover. Although this quarter’s relative increase is partly supported by the downturn in other sectors, there is no doubt that a significant perception shift has occurred, particularly in the retail park segment where no less than six retail parks have traded this quarter alone amounting to approx. €116m.
https://bannon.ie/wp-content/uploads/./aerial.jpg 500 800 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-06-22 12:18:042023-06-22 12:18:33Griffeen Centre, Lucan, Co. Dublin
Bannon are proud to bring the Griffeen Centre in Lucan, Dublin to the market for sale. This resilient neighbourhood centre comprises a strong mix of local services with a Centra (Musgraves Ltd.) anchor in the heart of a highly populated west Dublin suburb.
https://bannon.ie/wp-content/uploads/./dylan-nolte-NIrgENd0sAY-unsplash-1-scaled.jpg 1707 2560 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-06-16 12:51:262023-06-16 12:51:41Here to Stay? – Investor & Occupier Demand for Space
The effect hybrid working and ESG has, or will have, on office demand from office occupier, investor and owner standpoints cannot be considered in isolation. These influences must be considered within the wider office market ecosystem and how they operate in tandem to drive occupier decision making at lease event dates. The Covid Pandemic brought an instantaneous change to how we work whereas ESG requirements and regulations have been coming into the market at a steadier rate. While there is also uncertainty around the future of working models, that can be adapted and changed rapidly, there is no uncertainty about the increasingly important and dominant role ESG will play in the office sector. The ESG roll out will be slower and changes can be anticipated, however the ability to bring the stock to standard is a far more timely and resource intensive exercise.
Hybrid working for businesses will effectively assess how staff utilise office space as a resource to produce output. Ultimately it is the company who can decide how to implement their working models and the decisions will be led by the type of work carried out by the business, the need to attract and retain talent and the model that allows the business to grow and produce output efficiently. Both staff and workspace are a factor of production for a business and how the two are utilised against each other effectively to generate product should ultimately be the key focus of any commercial business. This should craft the post-pandemic workplace in the years ahead and this will likely differ industry by industry.
ESG considerations will continue to become more prominent drivers in the decision-making process for both occupiers, owners and investors. Currently, ESG in commercial real estate is very much lead by the private and financial markets, with factors such as corporate mandates and lender requirements influencing the demand for ESG grade space. It is envisaged that the regulatory environment (in an EU context) around occupation and investment will become more scrutinous and this will further drive the demand (and requirement) for ESG grade space in the future.
Occupiers will be looking into the impacts, whether they be positive of negative, that revised working models have on their ability to create an attractive and productive workspace as well as any ESG led requirements that are being implemented on a company specific or regulatory basis. The implementation of these will likely crystallise at either a lease break or expiry where spatial requirements can be most practically revised. Property owners will have to be cognisant of their occupiers’ requirements against key lease dates and how these correspond with asset management strategies to protect both the rental and market value of the building. Alternatively, investors must consider how to preserve or improve on an asset’s income at purchase or where opportunities may lie in bringing brown buildings into a green market.
Bannon have a suite of services available to assist CRE owners, occupiers and investors in strategic real estate decisions and ESG insights. Please feel free to reach out to discuss by emailing firstname.lastname@example.org.
Author: George Colyer, Surveyor, Bannon
https://bannon.ie/wp-content/uploads/Dublin-Investment-Market-Q1-2023-Snapshot-scaled.jpg 1340 2560 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-04-06 15:41:192023-04-06 15:41:52Investment Market – At a glance Q1 2023
The Q1 2023 Bannon Investment Pulse is now available providing a succinct summary of the Capital Markets transactions starting off the year.
With the Residential sector a surprising resilient highlight the total turnover of €625m is reflective of the current subdued sentiment in the market.
https://bannon.ie/wp-content/uploads/Investment-Market-Report-2022-23-Final_Page_01.jpg 1684 1191 Bannon Webpage Admin https://bannon.ie/wp-content/uploads/bannon-logo-trans.png Bannon Webpage Admin2023-01-30 11:58:122023-01-30 14:22:01Investment Market Review & Outlook 2022-23
For the property sector, while one of strongest capital market years on record (second only to 2019), 2022 will be best remembered as the “year of reckoning”. A year where a mixture of macro-economic and geopolitical issues combined to commence rebasing the market following almost a decade of effectively zero interest rates, low inflation, and expansive monetary policies.
To view the full report, please click here.