A total of €135 million worth of multi-family investments in Ireland transacted in the first half 2015, compared to €88 million over the same period last year. However, due to the much diminished deal flow of multi-family block opportunities expected to come to the market, we expect that transactions for the full year 2015 will be below the €580 million recorded over the course of the entire 2014. While supply may be reducing, demand from investors remains as robust as ever for a number of reasons.

Firstly, apartments have witnessed strong rental growth in recent years, with rents now just marginally below peak levels. Furthermore, continued rental growth is expected due, in part, to the recently introduced Irish Central Bank mortgage restrictions which increase the hurdle rate for home ownership and thereby will rise the proportion of the population renting. Finally, while the Dublin housing market has softened somewhat in the first five months of 2015, as evidenced by the 1.2% fall in house prices over the period, the apartment market continues to out-perform, growing by 5.4% according to Central Statistics Office data.

The difficulty in sourcing full ownership block opportunities in Dublin is driving investors to exploring part-ownership stakes as evidenced by the purchase of 128 of 538 units in Northern Cross, located along the Malahide Road, by US investment fund Marathon for €18.4 million. The lack of opportunities in Dublin and the spread of the residential recovery to the rest of Ireland have also led to funds ramping up their interest in residential blocks outside of the capital, as demonstrated by the acquisition, also by Marathon, of two blocks at Harty’s Quay along the Rochestown Road in Cork for €7.7 million.