Our commercial real estate market fights uncertainty
Published 25/06/2016 | 02:30
The UK vote threatens to play havoc with the Irish property market, but analysts say it will be some time before the long-term effect will be known.
The immediate impact is likely to see deals put on hold and perhaps prices renegotiated as investors assess the fallout.
Before the referendum, it had been suggested that financial houses in the City of London may move to Dublin to guarantee access to the EU. While that may happen in the short term, there is likely to be little movement in the years ahead.
The drop in sterling will hit tourism and have a knock on effect on the hotels market. Hotelier Dalata took a pasting on yesterday's market, plunging 14.4pc in Dublin to €4.16.
Some financial houses are likely to move to Dublin, but in a report before Thursday's vote, broker CBRE said most financial firms would look at moving operations to Paris of Frankfurt before Dublin. In any case, there is little space for companies or staff to move to Dublin, given the shortage of office space and housing at present.
Dublin property agent Lisney said the challenge will be "to have an adequate supply of office space available over the coming years, particularly in Dublin city centre. In spite of this, we don't expect a mass influx of companies and any increase in demand for space will be on a gradual basis".
Property broker Knight Frank said the referendum result "adds a considerable helping of uncertainty, which may act as a drag on activity over the summer months".
JLL Ireland chief executive John Moran said: "There may be some short term upside in terms of corporate activity and relocations but this may be counter balanced by medium term uncertainty and damage to our export economy and therefore growth.
"The biggest risk to the Irish market is a period of paralysis and lack of activity, however we believe the probability of this occurring is relatively remote," he added.