Ireland. Investors using their pension pots to back property investment
INVESTMENT levels in Northern Ireland’s commercial property sector appear to be on the increase again after a slow start to the year, as the funding options for those seeking to invest also expand.
After falling by more than a half to £213 million across 2016, the latest market forecasts suggest that figure could be surpassed in the third quarter of this year alone, with over £200m worth of deals that are currently being negotiated expected to complete over the summer months.
The senior lender market remains very competitive, given the limited opportunities to put money into appropriate commercial property transactions. We have also seen a more varied pool of funding options emerge over the past 12-24 months outside of traditional senior debt, especially for opportunities that bit further up the risk curve.
As the statistics demonstrate, the macro climate has stifled activity somewhat, despite the expanding funding market. However, one sector where we have seen continued strengthening of demand has been in the sub £3m pension investor market.
In light of historically low interest rates and concerns over potential fluctuations in the stock market during an uncertain Brexit negotiation phase, investors have turned to “bricks and mortar”.
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