CBRE stays positive on outlook for property
The years of record levels of activity in Ireland's commercial property market may have ended, but there will still be considerable opportunities for investors in 2018.
That's according to CBRE's Outlook 2018 annual report, which is due for publication today. "The Irish commercial real estate market is now approaching late cycle in many respects," said Marie Hunt, executive director and head of research at CBRE.
"However, occupier activity remains robust, development is controlled, the market is priced attractively compared to the rest of Europe and there are still considerable opportunities for both occupiers and investors alike."
As well as continued demand for office space and industrial and logistics opportunities, Ms Hunt said CBRE expects to see continued flows of capital into alternative sectors with particularly strong demand for residential investment opportunities in Dublin, owing to the stable long-term income streams housing can deliver.
While CBRE reports that 137 development land sales with a combined value of €750m were completed in 2017, it says there is a clear need to release more land for sale.
On this, the report states: "Now is the optimum time for landowners to bring sites to the market and capitalise on the depth of demand that prevails for well-located zoned and serviced sites".
Apart from the demand for housing in Dublin, its commuter counties and cities such as Cork, Limerick and Galway, CBRE expects the industrial and logistics sector to move into the development phase of the cycle in 2018, following a year in which severe shortages of stock served to fuel rental growth and hurt take-up volumes.
Despite the expected increase in the delivery of industrial and logistics space, CBRE believes that prime industrial rents in the Dublin market have the potential to increase by as much as 11pc in 2018.
In terms of the office market, the report predicts that the technology and financial services sectors will lead demand for space in Dublin this year. With headline rents for offices in the central business district hitting €700 per sq m at the end of 2017 however, CBRE expects an increasing proportion of the capital's leasing activity to occur in the suburbs where rents are less expensive.