Prime commercial rents still going up
Prime commercial rents have continued to rise across all sectors in Ireland, according to new research from property giant CBRE.
CBRE said that there are now 27 office developments under construction in the capital, and that prime rental values rose to €619 per square metre in recent weeks and are on target to reach the property group's own forecast of €700 per square metre by the end of the year. The office vacancy rate in Dublin is now 7.7pc.
But CBRE said that in the industrial and logistics property sector, prime industrial rents have not yet recovered to a level that renders new development viable.
In retail, the group said that the "biggest frustration" in the Irish retail property market is a "severe scarcity" of the stock in the shopping centres, high streets and retail parks that retailers are specifically targeting.
"The sheer length of time negotiations are taking is also frustrating, with landlords in general being more selective about the tenants and lease terms they are willing to accept now that the market is showing signs of recovery and the next phase of rent reviews is approaching," according to CBRE.
Marie Hunt, the head of research at CBRE, said that investor appetite for Irish commercial property "remains robust", particularly from institutional buyers who are focusing on prime assets.
"Monetary pricing continues to influence asset pricing in Europe and against this backdrop, Irish real estate, which offers the potential for significant rental growth, remains attractive to institutional investors," she said. "However, with deleveraging now firmly in its final phase in the Irish market, the pipeline of new investment product is less visible."