Estate agents
Lisney have predicted that investment sales in 2012 will be four or five times greater than the €200 million turnover from last year.According to a report in today’s Irish Times, the agency’s annual review attributed the fall-off in sales last year to a lack of finance and uncertainty about the government’s plans to retrospectively prohibit upwards-only rent reviews.
The increased level of stock to be brought on to the market this year would be driven by lending institutions, receivers and liquidators, according to the newspaper.
A higher level of transactions this year would bring greater assurance on current values, which should provide the banks with more confidence on their underwriting.
Lisney said that as shortages appeared in the rental market in prime areas – and when rental stability and growth comes nearer – the price gap between prime and secondary properties would widen.
There was unquestionably good value available but the existing supply of investment stock was a barrier to activity. The measures contained in the last Budget may be seen as a catalyst for a turn in the market’s fortunes.
Dealing with the market for development land, the report said the only purchasers were cash buyers who were prepared to consider land acquisition if it was vastly discounted.
The likelihood was that zoned land would continue to sell for agriculture use in 2012. In instances where land required major infrastructure and services, it would be a long time before this acreage became attractive to purchasers.
The report said that the volume of office space transacted in 2011 increased by 32%, with take up reaching 164,000sq m (1,765,280sq ft). Companies in the information, technology and related industries accounted for more than 38% of all space transacted.
Lisney estimated that there is currently 713,000sq m (7,674,660sq ft) of office space available in Dublin, representing over 20% of stock. The city centre rate accounted for 17.3%, but 28% of this space was either obsolete or nearing obsolescence and in a better market would be redeveloped.
The report said that with no speculative office construction due in 2012 and with the diminishing availability of grade A stock in the city, a situation may be reached shortly where occupiers requiring sizeable amounts of space would have to enter into an “economic deal” as opposed to a “market deal”.
Limited funding may become available for specific refurbishment projects in the city centre. The agency said it was possibly that there would be some limited growth in office rents this year, but real growth should return in 2013.
