It will be a busy year ahead according to a report by commercial property consultants CBRE.
They have today released their first bi-monthly analysis for 2015 focussing on trends in each sector of the Irish commercial property market in the opening months of the year.
The report shows that activity has continued at pace in the commercial property market during January and February following a record 2014. Although transactional activity has been subdued during the first two months of the year compared to Q4 (when activity was fuelled by the ending of the Capital Gains Tax (CGT) waiver on December 31st), there has been a lot of work done since Christmas on preparing assets and loan portfolios for sale over the coming months, suggesting that another busy year is in prospect.
Many of the larger investment transactions that have been agreed since Christmas have comprised office properties with the most notable being the sale of Project Tara for a combined price of almost €300 million although more retail properties are expected to be offered for sale over the coming months.
Following record take-up of almost 225,000m2 being achieved in the Dublin office market during 2014, January and February have seen a continuation of activity in this sector of the market with a number of notable lettings being negotiated and signed during the first two months of the year.
Prime rents today are in the order of €484 per square metre (€45 per square foot) although many buildings are now quoting headline rents of between €511 and €538 per square metre (€47.50-€50 per sq. ft.) which raises concerns about competitiveness and points towards stronger rental growth emerging in outlying and suburban locations over the coming months.
Marie Hunt, Executive Director and Head of Research at CBRE Ireland said, “Across all sectors of the Irish commercial property market, there has been a busy start to the year with a huge focus on preparing campaigns and getting assets and loan portfolios ready to launch.
“We are seeing increasing appetite from both local and international institutional investors, particularly in light of the attractive returns being generated from Irish real estate in the current low interest and low inflation environment. The market is transforming from one dominated by opportunistic investors to one that is being targeted by an increasing number of core investors with several new entrants emerging over recent months, which is encouraging,” she said.