CBRE Ireland have released their Real Estate Market Outlook for 2018.
This report provides final year figures for transactional activity in 2017, along with some key insights and predictions that our experts think will affect each sector of the Irish commercial property market over the course of the next 12 months.
In overall terms, the prospects for the Irish commercial property market remain very promising - although economics, tax and politics will continue to have a huge bearing on the trajectory of the market over the next 12 months.
Key takeaways include:
REVIEW 2017:
- 2017 was a very active year for the Irish CRE sector although returns & transaction volumes in many sectors returned to more normalised levels following 3 years of out-performance. The occupier markets continued at pace with the office sector being the star performer
OUTLOOK 2018:
- The Irish CRE market is now approaching late cycle in many respects. However, occupier activity remains robust, development is controlled, the market is priced attractively compared to the rest of Europe & there are still considerable opportunities for both occupiers & investors alike
- Continued strong investor demand for Irish real estate with many new entrants
- Continued flows of capital into alternative sectors during 2018
- Increasing competition between bank & non- bank lenders in the development sector
- Transactional activity in the investment sector will be broadly similar to last year’s outturn in 2018, as the market returns to a more normalised level of trading
- We could see up to €500 million of Irish hotels changing hands in 2018 with some Dublin hotels expected to come to the market
- Considerable expansion activity is expected to support another strong year of take-up in the Dublin office market in 2018 following a record performance last year
- The best prospects for rental growth in the office sector in 2018 will be in buildings in secondary and provincial locations
- Almost 5% of office take-up last year was to flexible & co-working tenants - a trend we expect to grow during 2018
- Prime industrial rents in the Dublin market have potential to increase by as much as 11% in 2018
- Retailers increasingly focussing attention on a relatively small pool of core locations and schemes
- Now is the optimum time to bring sites to the market and capitalise on the depth of demand that prevails for well-located zoned & serviced sites
- Room for some further yield compression and above average rental growth in Cork in 2018
You can download the full report here.
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