House building in Ireland increased by 23.6% in the first 7 months of 2006 and the flow of money shows no sign of easing, despite fears over higher borrowing rates, with hundreds of millions of pounds spent by new Irish entrants in recent months.

Investments include David Arnold's D2 Private, which, in April, paid £325m for Woolgate Exchange in the City and has since bought a £70m portfolio of HBOS bank branches.

This week saw Cosgrave Property Group pay Hammerson £281m for a shopping centre in Romford, Essex.

According to the Financial Times, the deal takes Cosgrave's UK spending up to almost £500m since January following the purchase of the £80m Caxtongate shopping area in Birmingham and a £136m pair of office blocks near London's Oxford Circus.

According to Hammerson, Romford was bought on a rental income of just £10m, suggesting an initial yield of only 3.5 per cent.

Major acquisitions made by Irish investors according to DTZ, during 2005 included:

• BP Pension Fund Knightsbridge Estate, 1-85 Brompton Road, London by Quinlan Private for £540 million

• Whitgift Shopping Centre, Croydon by Anglo Irish Assurance for £220 million

• 250 Bishopsgate, London by Evans Randall for £175 million

US investors were the second largest with around £2.6 billion of acquisitions, German third with £2.2 billion, Dutch fourth and Middle Eastern fifth with total purchases of £1.4 billion and £1.3 billion respectively.  With regards to the Dutch statistic, this primarily comprises of just one major deal, the acquisition of 128 commercial properties from Abbey National PLC by ING Real Estate for around £1.2 billion. 

Central London was the most popular location for overseas investors attracting 52% (£6.4 billion) of non-domestic capital in 2005. 

Turning to sector spread, offices continued to be the property type of choice for overseas investors attracting over half of total cross-border investment to stand at £6.3 billion – 80% of which emanates from central London.

Overseas investors will dig deep into their corporate purses to increase purchasing activity in UK real estate in 2006 and 2007 says global property adviser DTZ.

Trevor Gill, Associate Director, International Investment at DTZ Sherry Fitzgerald, comments: “Whilst some Irish investors are looking elsewhere for commercial property investments due to the recent movement in yields and SWAP rates, overall there appears to be little sign of a fall off in demand from Irish Investors who are looking to take advantage the growth prospects for London.  The drivers for this demand continue to include the positive rental growth story for the UK, a lack of available product in the Irish market, the availability of finance from Irish lending institutions for UK property transactions and a familiar market.”

Ben Cook, Associate Director, International Investment adds: “Greater appetite for UK real estate is expected from Asian and American investors, over the next 12 months, as well as from private investors from Ireland, the Middle East, Spain and Italy.  Australian investors have also become increasingly active in Europe over 2005 and it is strongly expected that their focus will broaden to include the UK as 2006 progresses.”

Autumn Investment Property Show, Citywest, Dublin September 8th-10th

Property investment in Europe hit a record €95 billion in the first six months of 2006 - a 30% jump on the same period in 2005 according to a recently published bulletin from Jones Lang LaSalle.

Paul O'Loughlin Kennedy, Investment Property Show Organiser, commented “The report felt the Irish contribution to the 15% of investment been attributed to private investors was significant enough to draw attention to it. The importance of this cannot be ignored. Conservative figures have suggested that between €5 and €6 billion will be invested abroad by individual private Irish investors in 2006. More often than not many of these will be amateur who will not be offered informed professional advice in several areas including tax and law prior to spending their money. I believe that it is the responsibility of anyone who can offer investment advice, whether an independent financial advisor, a legal firm or an accounting practice, to, at the very least ,understand the complexities of it in order to properly offer best advice to individuals.”