Commercial property sales now at 1983 levels
IRISH commercial properties are the cheapest in more than 30 years, but the market is coming back sharply.
A report from Goodbody Stockbrokers has found offices and retail units can be had for 25pc less than they were in real terms back in 1983.
Numerous reports have claimed the commercial market will see more than €1bn worth of deals this year and Goodbody chief economist Dermot O'Leary said he expected that trend to continue as investors searched for yield.
"The spread between commercial yields and the 10-year-bond yield is the highest it has ever been since at least 1985, and as long as that continues, investors will continue to favour the commercial sector," he said.
Despite the general recovery in the market, as in the residential sector it has been driven mainly by Dublin and the surrounding area – something Mr O'Leary put down to the "Google effect".
"When big international companies come to Ireland, in general they want to come to Dublin where the workforce and the skills are readily available," he claimed.
About 40pc of IDA site locations are in and around the capital, but more than 90pc of the financial and entertainment and media industry are based around the capital.
Goodbody says there is now a two-speed economy between the office and retail sector, with suitable offices now in much higher demand. The shortage of office space is acute, the broker claims, and that is unlikely to change in the short term.