Commercial property and Dublin office surges predicted to continue
CBRE, the commercial real estate agency, expects 2016 to be another positive year for commercial property after average transaction volumes were exceeded well in advance of year close of 2015.
Real estate services firm, JLL, and professional services firm PwC are also predicting a strong year off the back of significant growth in demand for commercial property in Dublin last year.
CBRE's Outlook 2016 report showed that 176 investment transactions of greater than €1m were concluded in the Irish market during 2015, totalling more than €3.5bn between them.
There were over 63 hotel sales completed last year, totalling over €710m.
Dublin pubs were also highlighted in the report, which said there were 39 sold in the capital last year amounting to over €49m. A further 17 Dublin pub properties totalling more than €25m were sale agreed at the end of last year.
The managing director of CBRE Ireland, Enda Luddy, said "2015 had many ingredients, that combined were supportive of strong commercial real estate activity including a considerable weight of Irish and overseas capital-chasing investment opportunities; strong occupational activity across all sectors; a supportive economic backdrop; strong job creation; rental growth; yield compression; muted development activity; and very low interest rates.
"Although some of these components will change over the course of the next 12 months and the outlook is constantly evolving, we are confident that 2016 will be another good year for the Irish commercial property market," Mr Luddy said.
Meanwhile, new research from commercial real estate services firm JLL showed that take-up in Dublin office space totalled 2.87m sq ft in 2015.
Take-up last year wasn't far off the 2.97m sq ft record set in 2007. Last year's figure was greatly helped by strong activity in the final quarter where almost 1m sq ft of office space was taken up after 64 deals were completed.
The last quarter of 2015 represented an increase of 62pc of take-up in office space in the capital when compared to the three-month period between July and September.
Seven of the 64 deals completed in the final three months of the year were for in excess of 40,000 sq ft, which included the largest letting of the quarter, to Workday at the Kings Buildings, some 95,000 sq ft
Dublin city centre occupied 60pc of take-up in the final quarter with a significant focus remaining on Dublin 2, with 39pc of the total take-up.
The demand for commercial property in Dublin is highlighted in new research from professional services firm PricewaterhouseCoopers.
Dublin ranks among the top three European cities for real estate investment for the last three years, according to research from PwC.
The 'Emerging Trends in Real Estate Europe 2016' study, published yesterday, said sentiment remains very positive in Dublin with significant demand from overseas companies.
The study said Dublin's retail recovery has only begun and that the city has seen a large volume of capital seeking to acquire retail assets.
The real estate partner at PwC Ireland, Enda Faughnan, said Ireland is seeing a new type of demand for commercial property.
"Investment is coming from a pretty broad spectrum of investor types - hedge funds, private equity players, pension funds, retail investors, wealth management, sovereign wealth and larger insurance companies.
"Distressed bargains are no longer the attraction. We are seeing real demand from overseas companies setting up in the city centre with younger staff who want to live in or close to the city centre. That creates a lot of rental opportunities," Mr Faughnan said.