independent

Friday 18 April 2014

What our experts say: Peter Flanagan, commercial property editor

There is a real sense that the market is "back" but (for now) it is a far more rational sector than it was before the boom-bust.

On the commercial side, 2013 was the best year for half a decade, as cheap, foreign money poured into Ireland. Rents are on the way back up and the office market in particular is thriving.

The consensus is for office rents to rise 15 per cent this year and already sale prices are surging. That will continue. This month the Platinum Portfolio of city centre office blocks sold for about 40 per cent above its asking price, and more will follow.

The key to 2014 will be how the secondary market does. Up to now, almost all the deals have involved top-level, grade-A offices in prime Dublin city centre locations. That is great, but supply for those kind of offices is drying up, and unless overseas buyers turn their attentions to the second level of the market, the recovery may well be stillborn.

Just as house prices in certain parts of Dublin leave the rest of the country behind, offices in Dublin 2 and 4 now have their own market.

For a sustained recovery the big money has to go beyond those areas.

Irish Independent

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