German Pensions Invest in Irish Property
One of the most recent high profile investors to back the Irish property market has emerged as it has been revealed that German Pensions invest in Irish Property.
Germany’s largest pension fund, Bayerische Versorgungskammer is to invest up to €1.3bn in a range of retail property investments around Ireland’s capital city, Dublin. The company has hired US real estate company Hines, which already has a range of projects in Ireland, to source a selection of investment property. The pension fund has specified that it is interested in retail investments on Dublin’s two permier retail streets, Grafton Street south of the rifer Liffey and Henry Street, off O’Connell Street, to the north of the river.
Hines already has significant investments in Ireland. It is the developer of a large residential, retail and office project in Cherrywood, a south Dublin suburb. It also bid for the sale of loans attached to south Dublin’s Dundrum Town Centre, which were ultimately purchased by Hammerson and Allianz.
In a huge boost to the attractiveness of the Irish commercial market, Brian Moran of Hines in Ireland says: “Our research shows that Dublin retail is the highest priority in Europe in terms of potential returns. Grafton Street, Henry Street and surrounding precincts are key targets.”
The pension fund intends to hold properties for 10 years or more. It also intends to target sites that need to be revamped or redeveloped. Moran claims that many European retail properties were starved of investment during and after the global financial crisis, and quite a few of these commercial investment properties now need work.
Moran disputes the argument that online retail will completely destroy high street retail. His counter argument is: “As habits change with the growth of online shopping, brands are asking for bigger stores to display their entire catalogues so that the customer can feel the product, even if the final purchase is online.”