After an unexpected and harsh year in 2020 what does the year ahead look like for your investment portfolio? Now is the time to consider the best strategies to undertake for your property portfolio.
The following should not be taken as financial advice but is simply a review of options currently on the table for investors in the Irish property market. Always seek professional advice before making any long term financial decisions.
Keep your options open
Possible strategies investors are considering include leaving rental property vacant to avoid those renters who are unable to keep up with rental payments, using this time to their advantage and upgrading their properties with the aim of increasing their yield when they return to the market. Also the return of potential investment opportunities in short-term getaways are on the rise as travel restrictions are expected to be eased this coming summer nationally, but international travel will most likely still be restricted, meaning the short-term sector may see a period of prosperity like no other.
There is also the opportunity of complete reinvention, converting and redeveloping unused and unwanted real estate is on the rise as it serves current and future market demands. From entertainment venues to office buildings now being left vacant, those with a sharp eye will see opportunity everywhere.
Despite the impacts of 2020, the property investment market still managed a market turnover of €3bn despite multiple obvious barriers, this in itself is proof of the resilience of the Irish property market at the moment – obviously helped on by the worst housing crisis in memory. If last year was any indication on what’s good to invest in, the private rental sector still managed a robust performance accounting for 53% of investment activity in the second half of 2020. By the end of 2020 PRS held 39% of the investment market with one major contributor being the sale of Blackwood Square on Dublin’s northside by Cosgrave Property Group to Round Hill Capital/QuadReal for €123.5m.
Additionally, Q4 of 2020 saw €1.3bn invested in income producing real estate assets, which brought year-to-date investment volumes to €3.0bn. Recent reports have seen the office sector account for 41% of turnover and private equity investors and institutional investors were the dominant buyer types in 2020 making up 72% of total flows.
As usual there is no crystal ball involved here and I think it’s safe to say there is no way to know for certain that the property market will hold up, but judging by the performance of the sector through one of the biggest economic shocks of the last century, it is a good bet that yields will return to and even surpass those levels of pre-covid times. As we’ve said before, it’s just a case of who owns what by then.
As always if you need any advice or help with your property portfolio, please don’t hesitate to contact us here at KPM Group and we’ll be happy to help in any way we can.