Long-term international investors are buying into the revival of Dublin City….
Two of the biggest property sales in Dublin this year went to U.S.-based Starwood Property Trust and Germany’s Union Investment Real Estate GmbH, long-term investors from out of town. The deals mark a shift for Ireland, where private-equity firms, typically interested in flipping properties for quick returns, dominated in the immediate aftermath of the country’s financial crisis.
Long-term capital is replacing the short-term capital firm and this level of institutional capital coming from overseas “is new for Ireland,”
Starwood Property Trust, the biggest U.S. commercial mortgage real-estate investment trust, paid about €452 million ($508 million) for 12 Dublin office buildings and a multifamily residential property, according to the firm. It was the biggest property deal in Ireland so far this year.
Union Investment, an arm of German lender DZ Bank AG, last month bought two office buildings rented to Facebook Inc. for €230 million,
Starwood bought the Dublin portfolio—its second acquisition in a long-term investment strategy that started with a U.S. shopping mall portfolio last year—from U.S. private-equity firm Lone Star Funds.
In the last boom, the feeling was that essentially, we bought from and sold to ourselves, which distorted true real estate values.
Investment from overseas provides a benchmarking of property value here against other overseas property markets.
Although above activity is confined to Dublin at present, the knock on effect to property interest outside the capital is set to follow.