Demand for retail climbing as market continues to gain
THE commercial property market continued to forge ahead in March and April with activity in the sector continuing to grow.
According to CBRE's latest report on the state of the market, activity in the retail sector improved sharply.
"There has been a considerable increase in demand for well-located retail premises over recent months, particularly in Dublin and other large population centres," claims the report.
With signs of improvement becoming increasingly evident in the retail occupier market ahead of the traditional summer selling season, and signs of rental growth on the horizon, investor appetite for the various shopping centres which are due to come to the market around the country over the coming months, says the agent.
"Following bumper activity being achieved in the Irish commercial property market during the first two months of 2014, March and April have proved equally busy with significant volumes of transactional activity occurring in all sectors of the market," said CBRE's head of research Marie Hunt.
"In addition to a considerable volume of property currently being offered for sale, which is attracting interest from a range of Irish and international investors, both direct and indirect, there is good visibility on the extent of deleveraging that has yet to occur in the Irish market which is encouraging investors," she added.
Much of that investment is expected to come in the office market, which continues to thrive.
Significantly though, it is expected that suburban offices will become more attractive over the coming months as cost-sensitive occupiers such as those in the technology sector seek out more affordable accommodation options.
"Many of the very large overseas entities that have been purchasing assets in the Irish market over the last 12 months are now primarily focussed on securing some of the large loan sales and larger asset portfolios that have been coming to the market and are therefore less interested in some of the smaller properties and portfolios being offered for sale," emphasised Ms Hunt.
On the land market, an increase in volumes coming to market is expected but, as with other property types, it will be the large sites that offer the scale required for large projects that will attract the major buyers. The total volume of sales is now expected to comfortably beat 2013, and will be boosted by the Government's confirmation last month that the capital gains exemption extended at the last Budget will not be renewed at the end of this year.
That deadline is now seen as boosting activity in 2014 as sellers rush to close deals before the extension expires.