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Saturday 12 July 2014

Moving into recovery phase in 2013 market

Published 24/01/2013|05:00

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A glut of commercial property sales to exploit the 2013 capital gains tax holiday has been ruled out by property consultants CBRE. Instead, it expects properties will continue to come to the market on a relatively controlled basis over the course of 2013. Consequently, the consultants consider that both rents and prices for prime Dublin properties will increase.

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On the other hand, CBRE director Marie Hunt says she is "more sanguine about prospects for secondary and provincial properties, which will take longer to unwind".

Announcing the firm's top 10 tips for the year she says: "There will be more loan sales activity in 2013 as banks continue to deleverage their property holdings, while we could also see the disposal of some of the underlying securities that were sold by way of loan sales during 2012.

"A busy year is in prospect for Irish commercial property as the wreckage is cleared away and we move into a recovery phase for the economy and, in turn, for the property market. However, the prospects for prime property are considerably better than secondary, with increased polarisation likely to be a key trend in 2013."

International investors will continue to focus on prime Dublin office, retail and residential portfolios and despite lack of short-term rental growth, the funding available to them could push up prime prices. Furthermore there is potential for some limited rental growth at the prime end of the office and retail sectors in 2013, although for the most part, rents are likely to remain relatively stable over the course of the next 12 months. In contrast, Irish investors will dominate the secondary and provincial investments, some of which are expected to see further price falls as the level of cash buying is absorbed.

"Many international investors in the investment and hotel sectors have the potential to bring funding with them which will be a significant boost for liquidity in the Irish market," she adds.

Some international buyers could emerge for strategic Dublin development sites which offer potential for office and/or residential development in the medium term.

More hotels and pubs will be brought to the market, although fewer hotels are expected to go into receivership this year.

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