2024-11-18-莱坊-Ireland_Development_Land_Ireland_Development_Land_-_H1_2024_2页_58kb

Ireland Development Land Market Summary (H1 2024)

Core Content

The Irish development land market experienced a significant increase in activity during the first half of 2024, with €238 million in transactions, more than double the €117 million recorded in the same period in 2023. This surge was driven by several factors including the return of inflation to target levels, the anticipation of interest rate cuts, and the moderation of material and energy prices, which have made build costs more predictable. Additionally, government initiatives such as the Development Contribution Waiver and the refund of water and wastewater connection charges have improved the viability of development projects and encouraged new starts.

Key Trends and Statistics

• Activity by Size:

  • Larger transactions (€20m-€50m and >€50m) accounted for 41% of the total activity.
  • Mid-sized transactions (€5m-€10m and €10m-€20m) made up 40%.
  • Smaller transactions (<€1m and €1m-€5m) comprised 19%.

• Sector Demand:

  • Residential development land was the most in-demand, accounting for 70% of the total activity.
    • Sites for first-time buyers, social housing, and student accommodation were especially sought after.
    • 71% of residential land acquisitions had planning in place, indicating a preference for secured opportunities.
  • Commercial development land accounted for 24% of activity, with logistics schemes being highly desirable due to structural drivers like e-commerce and supply chain needs.
    • A notable commercial transaction involved Mountpark acquiring 78 acres in Lucan for €48 million.
  • Mixed-use development land made up the remaining 6% of activity.

Notable Transactions

Outlook

Knight Frank anticipates that the development land market will see continued strong activity in the second half of 2024, with total volumes expected to exceed the €500 million transacted in 2023. The market is supported by new population growth projections from the Central Statistics Office (CSO), which suggest double-digit growth between 2023 and 2057. This, in turn, supports a revised government housing target, calling for 61,000 units per year by 2027 across various buyer and renter categories.

To meet these targets, more land will need to be residentially zoned, reversing recent trends of de-zoning. However, obtaining planning approval in a reasonable timeframe remains a critical challenge. While some progress has been made, including the introduction of the LRD process and increased staffing at An Bord Pleanala, delays persist. The upcoming Planning and Development Bill is expected to bring a pause to the market as it is digested, but it is seen as necessary to streamline the planning process.

Funding is also a key factor, with the Department of Finance estimating that over €20 billion will be required annually to achieve a housing delivery of 50,000 units. International capital is expected to play a crucial role in supplementing domestic sources, though rental caps are currently viewed as a barrier to investment.

Conclusion

The Irish development land market has shown marked improvement in H1 2024, with increased activity and a broader range of buyers. Residential land remains the dominant sector, supported by demographic and structural factors. Commercial and mixed-use land also saw increased interest, particularly in logistics and repurposed office spaces. Despite these positive trends, challenges remain, particularly in the planning and funding sectors, which will be critical to sustaining momentum in the coming months and years.