U.S. Sets Its Distressed Assets Sights on Ireland

Rather than looking locally to boost its real estate market, Ireland has embraced American buyers to invest in Ireland’s distressed assets. Ireland has already become one of the places to be in terms of FinTech (financial technology), and foreign employees are being wooed to move to Ireland for technological employment opportunities. Perhaps in response, the commercial real estate sector is showing an increased presence to keep up with the FinTech Joneses. Some of the reasons for this include the changing cultural and economic growth of the area, and other changing factors:

Property Partners

A great number of Ireland’s top properties have been purchased by international buyers, ones who were able to scoop up distressed properties below their original evaluation. Even at such a reduced value, it’s believed that the Irish real estate market will continue to thrive for at least the next three years.

Before Ireland experienced a financial crisis, it was common for international buyers to sate their appetites for property with small office portfolios and occasional real estate investments in the form of UK assurance companies.

Changing Times

But today, the United States has been diving into the Irish market and has been snatching up distressed assets instead. Interestingly, the heightened interest in Ireland has subsequently strengthened the Sterling without much effort from England.

One of the main reasons there has been so much international interest in Ireland’s real estate market was its (now quickly dissipating) financial crisis. While an Irish property’s overall value could be substantial, a market infrastructure wasn’t in place to support an equally substantial price on that valuable property, leading to dramatic price drop. Rather than a restoration of faith in the property market coming from within, it instead came from international buyers. But these international investors’ money is allowing for a change in Ireland’s local real estate buying market.

Bringing it Back Home

Domestic funds Iput and Irish Life have started to put their upgraded liquidity to good use in their local markets, and have bought up leading investments. Iput has invested heavily in logistics, retail and office properties while Irish Life has focused mostly on office commercial real estate. With these combined efforts from domestic and international buyers, Ireland now heads the pack in having the euro area’s fastest-growing economy for four consecutive years.

Reaching out internationally to real estate buyers has also garnered some favorable responses from domestic investors. With the bump from international attention in distressed assets strengthening Ireland’s economy, local buyers’ financial situations are increasing enough to begin buying locally — further establishing the Isles as a new player in the financial space.

Sources

Irish Times

Photo

B-Secur