TURNOVER in the commercial property investment market this year could reach the 2008 figure of €750 million if the deals currently agreed are completed, according to the latest report on the Irish market by agents Savills. Demand is now outstripping supply for prime investment opportunities and prime yields are stabilising. However the report says transactions are taking significantly longer to complete and this is acting as a drag on overall turnover figures.

The largest sale underway – and not identified in the Savills report – is that involving Liffey Valley shopping centre in west Dublin, which is taking an inordinate amount of time to complete mainly because of the layout, location and future use of development lands on the site. Two UK investment funds are in negotiations to buy the centre, having offered €350 for it and an adjoining site of 7 hectares (17.3 acres) that will accomodate the second phase of the retail scheme. Meanwhile turnover in the first six months of this year was higher than in the same period of 2009, at just over €130 million compared to €85 million last year, according to Joan Henry, head of research at Savills. Seven transactions in Q2 brought the turnover to around €80 million compared to 22 sales in Q1 with a value of €50 million. All the transactions in the three months up to the end of June, with the exception of one, were in lot sizes below €10 million. The single larger deal valued at €50 million was accounted for four separate office properties.

Michael Clarke, of Savills’ investment division, estimated there are about 10 other transactions currently agreed which, if completed in the third quarter, could bring the nine month figure up to €600 million. The supply of investment properties remains at its lowest level since 2005 largely because of the collapse in values and scarcity of bank funding. And Savills is expecting good quality investments to remain scarce in the short term. “We estimate the current supply of investment stock available on the market – and not currently under offer – is still in the region of €250 million, the same as in Q1. Most of the stock is comprised of non-prime assets for which there is poor demand. In addition there are a number of quality assets being discreetly offered for sale. Any reasonably priced prime assets that have come to the market this a year are attracting a good level of interest.”