The Irish Build to Rent market continues to soar as institutional investment increases. Data by CBRE shows that €898m was spent on build-to-rent investments in the first half of 2019, accounting for almost 43% of the €2.1bn of investment deals in the period.
And it’s not just Dublin that is leading the way with the number of build-to-rent portfolios, Cork and Galway are also seeing an increase in these developments.
What’s behind the growth? Ireland has historically been a country of homeowners, however rising property prices and stagnant wages have made owning a home a dream for many. Approximately 115,000 people – 60% of under-35s in Dublin and 14% of over-35s – now live in rented accommodation. In addition, extreme taxation has caused many smaller investors to leave the market, creating a shortage in high quality rental accommodation.
The Irish property market has responded in kind by increasing the quality, service and affordability of rental accommodation. These new buildings represent a new way to rent for many people by providing state of the art facilities and amenities such as on-site gyms, 24-hour concierge services and even resident events.
Gross yields average around 5% and evidence suggests the most successful build-to-rent schemes are located in urban centres with excellent transport links. In Dublin, V North Docklands, Mount Argus, and The Benson Building are all excellent examples of build-to-rent developments taking a similar strategy. New developers and investors would be well-served to follow in their footsteps in order to achieve similarly high competitive yields.
In Ireland, we have monitored and advised on developments such as Honeypark in Dun Laoghaire, The Benson Building on The Quays, The Trinity Collection in Clongriffin, Mount Argus in Harold’s Cross and the Elysian in Cork. We have also provided technical support for the sale and purchase of many existing schemes and developments to new owners.
With Ireland poised for years of additional growth in the private rental market we look forward to seeing how build to rent progresses.