Blog post by Sven Scherbetitsch, Director Research & Investment Strategy, Real I.S. AG
Real I.S. AG has already acquired ten properties in Ireland worth approximately €570 million for its investors, eight of which are residential properties in the Dublin metropolitan region. These include a residential property recently acquired for the “Modern Living” open-ended real estate special AIF with 93 residential units in a central location in the Irish capital. But what is it that makes the real estate market in Ireland attractive for investors?
Ireland and its proven crisis resilience
Ireland’s housing market is benefiting from dynamic economic expansion and strong population growth. Between 2009 and 2019, Ireland's gross domestic product increased by around 80 percent, more than any other EU state. Even in 2020 and 2021, years marked by the coronavirus pandemic, Ireland proved its resilience to the crisis, achieving economic growth of 5.9 percent and 13.5 percent respectively. Despite global headwinds, including the war in Ukraine, the International Monetary Fund (IMF) puts growth in Irish economic output at 7.5 percent in 2022 and 5.0 percent in 2023. For the EU as a whole, IMF estimates only 2.8 percent for 2022 and 1.6 percent for 2023. A very positive impact on Ireland's economic performance emanates from multinational corporations such as Apple, Facebook and Google, which maintain their European headquarters in Ireland.
Another important factor for real estate investors is that the Irish population is growing rapidly, and with it the already strong demand for housing. A high birth rate and a large influx of people are ensuring steady population growth. In 2021, Ireland's population totaled around five million and, according to expert estimates, is expected to rise to around 5.5 million by 2030. The Irish capital Dublin is already home to around 550,000 people, while the entire metropolitan region has a population of more than 1.2 million, which remains in an uptrend. Population growth is fueling excess demand for rental apartments, making Ireland an important target market for Real I.S. AG.
A look at the Real I.S. portfolio – contemporary properties in attractive locations
Residential real estate in Ireland is not a foregone conclusion, however. The market there also need to be carefully screened and the risk/return ratio checked at property level. The properties acquired by Real I.S. are characterized above all by the following: high quality of the buildings and an extremely attractive location. Both are prerequisites for an investment with lasting value.
Real I.S. residential investments in Ireland are focused on Dublin. The Irish capital is not only the economic engine of the country, but also the cultural center and a highly sought-after residential location due to the large number of attractive jobs and the high standard of living. In addition to many sights, numerous green spaces such as Phoenix Park, the largest inner-city park in Europe, make life in Dublin attractive. Real I.S. AG has so far acquired seven properties for its funds, all of which are located directly in Dublin in popular residential locations, including the "Knockrabo" property, a residential complex with 5,900 square meters of living space completed in 2020 in the south of Dublin and also marking the first purchase outside Germany for the "Real I.S. Wohnen I" special AIF.
The surrounding area of Dublin also offers potential, however. The town of Greystones, for instance, is a popular residential location. The town is characterized by its picturesque High Street, and a direct train connection allows commuters to quickly reach the capital of Dublin, which is only 27 kilometers away. In April 2022, Real I.S. acquired another residential block of the "Marina Village" in Greystones for the "BGV IX" real estate special AIF consisting of 33 residential units with more than 3,300 square meters of rental space. The building will be completed by the end of 2023. Real I.S. had already purchased two residential blocks with a total of 134 apartments in this pioneering residential project in 2021, featuring a complex of six residential blocks in total, as well as terraced and semi-detached houses. In addition to a unique lake view and situation directly on the harbor, the location is captivating due to its direct access to the beach and the Coastal Linear Park, as well being within walking distance of the Greystones train station.
Conclusion
The Irish residential real estate market is hallmarked by high demand and crisis resilience, with positive prospects for rental growth. Due to the country’s stable economic development and population growth, the outlook remains fundamentally favorable. Compared with other European markets, Ireland also offers higher returns on real estate investments, making it a very attractive location for investors. Real estate investors would do well to keep an eye on this dynamic market.