Dublin ranks in top 7 European cities for real estate investment

09 November, 2017

PwC's 2018 Emerging Trends in Real Estate Europe: Joanne Kelly, John Bruder, Maire Hunt and Ken Tyrrell, PwC Partner, Real Estate Deals.

Pictured at the launch of PwC's 2018 Emerging Trends in Real Estate Europe are (l-r): Joanne Kelly, PwC's Head of Real Estate; John Bruder, Urban Land Institute Ireland Chair; Maire Hunt, Head of Research, CBRE and Ken Tyrrell, PwC Partner, Real Estate Deals.

A new report ranks Dublin in 7th place out of 31 European cities for real estate investment and development. Berlin takes the top spot, followed by Copenhagen and Frankfurt (joint 2nd), Munich (4th), Madrid (5th) and Hamburg (6th). The annual forecast, published by PwC and the Urban Land Institute (ULI), surveys over 800 real estate professionals in Europe.

Joanne Kelly, PwC Ireland Real Estate Leader, said: “Dublin is settling into a new phase as a normalised, mature and safe market to invest in. After years of opportunistic investing, the make-up of buyers is changing. There is less US private equity capital and much more European institutional money, especially from Germany, France, Switzerland and the UK.”

According to the report, Dublin is universally viewed as one of the cities likely to benefit from Brexit. With a skilled, English-speaking workforce, Brexit will attract banks and financial services to Ireland. This will drive demand for commercial property.

There are also concerns about potential negative effects, particularly on Irish tourism, if Brexit were to cause a UK recession.

The city’s infrastructure is viewed by respondents as not keeping pace with growth. This is seen as another risk where more investment is needed. The report also notes that Dublin needs more housing. Respondents see the private rented sector and student housing as a huge opportunity in the next three to five years.

Ilona McElroy, PwC Ireland Real Estate Tax Leader, added: “According to the report, the capital’s property market is ‘close to fully recovered’ with most of the yield compression having already happened.

Investors see Dublin as a good location for stable income, with healthy tenant demand from growing companies. The city has developed strong niches in financial services, US tech companies and aviation leasing and its airport is well-connected to the UK and the US. Retail is also a hot topic in Dublin with city centre streets, shopping centres and retail parks being targets for big investors over the least two years.”

The findings show that the property industry is cautiously optimistic about its European business prospects in 2018. Around half of survey respondents predict that profits and headcounts will increase next year and 42% expect an increase in business confidence — a 10% jump from last year’s results.

The report also points out the increasing complexity of how the real estate industry conducts business, brought on by new customer demands and the concept of “space as a service”. These new requirements mean that real estate companies will need new skillsets to harness big data. New technology will also be required to improve decision making, management, and valuation processes.

“Our conversations with industry leaders have demonstrated that technology is increasingly being viewed as one of the key trends affecting real estate,” said John Bruder, ULI Ireland Chairperson. "We are seeing a growing emphasis on the impact technology has on all aspects of real estate, ranging from the changing behaviour of users to the real estate management and valuation process, and the new skills needed to successfully adapt to this new reality.”

Ilona McElroy, commented: “Against a backdrop of a brighter general economic outlook and stronger occupier demand across much of Europe, our interviews with industry leaders reveal a sector that is looking more closely at disruption and beyond the traditional timeframe of the property cycle.

Businesses are being challenged to remain relevant in the face of increasing disruption, to respond to emerging new market entrants and to seize the opportunities presented by forming new partnerships and business models.”


About PwC
At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 158 countries with over 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2018 PwC. All rights reserved

Contact us

Joanne Kelly
Partner, PwC Ireland (Republic of)
Tel: +353 1 792 6774

Ilona McElroy
Partner, PwC Ireland (Republic of)
Tel: +353 1 792 8768

Johanna Dehaene
Corporate Communications, PwC Ireland (Republic of)
Tel: +353 1 792 6547

Follow PwC Ireland