Irish cross-border investment into European real estate will shatter the â‚¬1 billion record this year and is expected to continue to rise in the future with the UK being the main beneficiary, says research from DTZ.
Statistics collated by DTZ Research show that continued strong Irish investor interest in prime property across Europe will see the â‚¬1 billion record, set only last year, being broken again by the end of 2002 with figures for the first half of the year having already reached â‚¬900 million.
The UK continues to attract the lion´s-share of Irish cross-border investment accounting for in excess of 90% of all Irish investment since 1999. Investment into UK commercial property from Ireland stood at less than â‚¬100 million in 1997, however, soaring Irish interest in UK real estate has seen this figure swell to almost â‚¬900 million in the first half of 2002. This figure accounts for 11% of total recorded cross-border transactions in the UK for this period.
This is in stark contrast to Irish domestic activity, which has seen investment fall to less than half the total recorded in 1999. Statistics show that for the first half of 2002, domestic activity totalled just â‚¬200 million whereas in 1999 investment reached around â‚¬700 million.
Commenting on why the UK continues to be the most popular location for Irish investors, James Morton, Associate Director at DTZ, said: 'The attraction of the UK real estate market continues to be underpinned by many of the factors that have made the market attractive to date, namely a familiar lease structure, geographical proximity, a common language and attractive yield/performance profiles.
'The outlook for the UK economy is still amongst the best in Europe and with growth expected to continue at just below trend next year, the diversification benefits offered by UK real estate (which may be greater while the UK remains outside the Euro-zone) look set to continue.'
London remains the most attractive location for Irish investment, attracting almost 40% of the total investment during the first half of 2002, with offices continuing to be the preferred sector accounting for 50% of investments during the first half of this year. However, there has noticeably been increasing investor interest in mixed-use properties, as this type of investment has become more accessible, with this emerging sector accounting for 40% of total Irish investment for the first half of 2002.
(source: DTZ International)