Transactions in the development land market in Ireland experienced a significant decline in the first half of this year, reaching a total value of €134m, according to a report by Sherry Fitzgerald. This represents a 65% decrease compared to the same period in 2022. Over the past nine years, the average total spend during the first six months of the year was €309m.
The report highlights that the volume of transactions was equally low, attributing this decline to higher borrowing costs and the impact of construction-cost inflation. Only 34 development land sales took place between January and June, significantly lower than the 63 transactions recorded during the same period in 2022 and below the long-term average of 60.
Sherry Fitzgerald’s report also reveals that there were no transactions exceeding €15m in value during the six-month period. Additionally, a higher proportion of smaller sites, less than five acres in size, changed hands. These smaller sites accounted for 65% of the traded land.
The largest transactions recorded involved the sale of a residential site at Rockbrook in Sandyford Business District. Irish Residential Properties Reit, Ireland’s largest private landlord, sold the site to Comer Group for €13m. Residential land comprised 58% of all transactions, while land for commercial or industrial use accounted for 14%. Lands zoned for mixed-use represented a further 25%.
The greater Dublin area dominated the total land spend, accounting for 71% of transactions. The cities of Cork and Galway represented 15% and 14% respectively.
Overall, the decline in transactions and total value in the development land market during the first half of this year can be attributed to several factors, including higher borrowing costs and construction-cost inflation. The lower volume of transactions reflects a cautious approach from investors and developers in the current market conditions.