- Townmore: Development Land in Ireland
Townmore: Development Land in Ireland
According to an article in the Irish Times earlier this week, sales of development land in 2019 across the greater Dublin area, Cork, Limerick and Galway reached €1.2 billion. This is the second consecutive year transactions for this sector exceeded €1 billion over a 12 month period. We know that approximately 70 percent of all development land sold in 2019 was for residential development. The above mentioned article was based on the most recent sectoral research from Cushman & Wakefield.
While 2019 has been hailed as the year of the ‘mega deal’, with 18 transactions each exceeding €100 million (all in the greater Dublin area), the overall number of transactions dropped to 125, which was down from 203 in 2018. Here at Townmore, what we found significant was that the decline in transactions was most sharply-felt in the sub €5 million price bracket. In fact, the number of development site transactions below €5 million fell more than 40 percent over the 12 month period. Anecdotally, this can be attributed to a number of factors, not least of all supply. As a result, competition in this particular sector of the market is intense. This is particularly true for land in Dublin, Kildare, Meath and Wicklow.
Outside of the greater Dublin area, the development land market in Cork City is thriving, with the volume of transactions in 2019 up more than 25 percent on the previous year. Similarly, demand for residential development land in Galway and Limerick increased, albeit not to the same extent as in Cork.
As our firm delivers homes, commercial, industrial and whole range of other specialist building projects across all of Ireland and the UK, it is interesting to see where the next wave of development is likely to appear – and indeed in what sector. The PRS, including student accommodation and coliving, has dominated planning news since the start of the year and this is welcome, however, we need to see warehousing, logistic centres, transport hubs and key supporting infrastructure start to catch up at this stage. It has been several years since our then Housing Minister Simon Coveney spoke of Ireland’s “lost decade of infrastructure” but have we made any real inroads into this? With the exception of a few headline projects, it does not appear so.
Increasingly it looks like the State has put a heavy burden on urban planning – both public and private – to address inadequacies in our capital project programmes when, perhaps, this burden (opportunity?) needs to shift to the newly-formed Land Development Agency, or LDA. Significantly, the LDA has the potential to operate with less interference from the political party of the day, whichever party that may be, than any public planning function and this could be key to achieving the longevity that any national property strategy requires. Of course, the current political uncertainty means that we do not know what to expect of our next Housing Minister.