Busy Autumn Season Anticipated For The Irish Commercial Property Market

Dublin, September 1st, 2018 - Commercial property specialists CBRE today released their latest bi-monthly report focusing on the latest trends and transactions in all sectors of the Irish commercial property market.

Please click here to access the full report.

Marie Hunt, Executive Director and Head of Research, CBRE Ireland
"Following the traditional ‘pause for breath’ during the Summer months, the Irish commercial property market is now gearing up for what promises to be an extremely strong Autumn season.  While very few new properties were formally launched for sale during the last two months, there was considerable activity underway behind the scenes during July and August, concluding various transactions as well as preparing assets that will be formally launched or sale over the coming months.  Activity in all of the occupier markets (office, industrial, retail, hotels) remains strong. Meanwhile, from an investment perspective, following a very strong first half, there are several transactions due to complete over the coming months and more than €1 billion of new stock due to be released for sale.  There has been a remarkable increase in appetite for residential investment opportunities over recent months, which is evident from recent investment sales and development land sales alike”.
Marie Hunt, Executive Director and Head of Research, CBRE Ireland


  • Having achieved impressive take-up of over 160,000m2 in the first half of 2018, there has been continued momentum in the Dublin office market over the Summer. In addition to a healthy volume of stock reserved, there are a number of active requirements yet to be fulfilled. Several of these requirements extend to more than 9,290m2 (100,000 sq. ft.) although there are a number of mid-size requirements prevailing also, which is encouraging. While not all of these requirements will translate into completed transactions by year-end, nevertheless CBRE are expecting a healthy volume of leasing activity to be recorded in the capital between now and Christmas, boosted by a number of large transactions, which are currently in legals.
  • Potential occupiers now have clear visibility on availability in the Dublin market, which to some degree is alleviating pressure to get transactions across the line.
  • The bulk of activity in the Dublin office market continues to emanate from the expansion of existing occupiers, many of whom are technology companies. There is also strong demand from flexible office providers who between them accounted for more than 15% of overall take-up in the Dublin market in the first half of 2018.
  • As pre-lettings sign and new buildings are leased up in the capital, this will in turn give developers (and their funders) confidence to proceed with additional development phases in due course. According to CBRE research, there are currently 30 office schemes under construction in the capital.


Industrial & Logistics

  • The volume of take-up recorded in the Dublin industrial & logistics sector in the first half of 2018 (108,925m2) masks underlying volumes of activity in this sector, with good volumes of occupier demand prevailing for both modern and secondary buildings along the key corridors around the M50. With several transactions in legals at present and a healthy volume of active requirements, a busy Autumn is now anticipated, which should see industrial and logistics take-up in H2 beating volumes achieved in the first half of 2018.
  • In addition to ‘Build-to-Suit’ developments that are underway at present, several of the speculative industrial buildings that are currently under construction in the capital have been, or are in the process of being, pre-let, which in turn is encouraging developers to proceed with additional phases and new schemes. This will create much-needed new supply of modern industrial and logistics stock from an occupier and investor viewpoint in due course.
  • Although industrial rental values have remained stable over recent months, we are expecting to see further upward pressure on prime rents before year-end as new transactional evidence materialises.


  • The Irish retail occupier market is bucking the European trend at present with footfall, consumer sentiment and retail sales all continuing to perform well, supported by a strong economic backdrop and bumper tourist activity.
  • Good weather together with a notable improvement in the volume of housebuilding across Ireland over recent months has provided a particular boost for retail parks throughout the country.
  • Following several years of virtually no new retail development in Ireland, there has been some improvement in supply of late, which has been welcomed by the many retailers with active requirements.


  • Investment spend in the Irish market surprised on the upside in the first half of 2018 with more than €1.86 billion invested in the six-month period, buoyed to a large degree by 8 transactions in excess of €100 million, some of which were residential forward-funding transactions. PRS/Build to Rent is becoming increasingly mainstream, having accounted for 25% of investment spend in the Irish market in the first half of 2018.
  • Although yield compression has remained elusive over recent quarters, income growth remains attractive with total returns from Irish commercial real estate running at 7% on an annualised basis to the mid-year point and returns of 4.6% achieved in the first half of 2018 alone, according to MSCI. This rate of return compares favourably with other European locations being targeted by investors at present.
  • Although we are seeing a myriad of different structures emerging, the profile of investors looking at opportunities in the Irish market remains consistent, led in the main by European institutional buyers. There has been an increase in UK firms looking to deploy capital in the Irish market over recent months while the much-heralded arrival of Asian investors is also becoming more tangible as evidenced by some recent transactions in the office sector of the market.
  • For various reasons, the buyer pool for retail investments thinned considerably across Europe during the first half of 2018 leading to a softening in retail yields in some locations. Although several investors are opting to divest of retail assets across Europe, this in turn is enabling other counter cyclical investors to deploy capital into this sector. On the basis that the retail occupier market in Ireland is comparatively strong in European terms and buoyed by healthy job creation, wage inflation, rising house prices and population growth, it will be interesting to monitor the strength of appetite and pricing for some of the retail assets that are expected to be formally offered for sale in the Irish market this Autumn.



  • Almost €400 million of development land sales were completed in the Irish market in the first half of 2018 and there has been continued momentum over the Summer months, which bodes well for transactional activity in this sector for the year as a whole. In addition to land sales, there is very strong appetite to forward fund and forward commit to PRS/Build to Rent schemes, as evidenced by the many transactions recorded in the year to date. The volume of international capital targeting this sector continues to increase with a notable increase in appetite for co-living concepts over recent months.
  • In addition to some sizeable land parcels offered to the market over recent months, we expect to see a number of good sites being released for sale this Autumn, several of which are likely to be offered by way of license deals. Some sales over the coming months will be influenced by the fact that the Governments’ Vacant Site Tax is due to increase from 3% to 7% next January.
  • The recent publication of the Department of Housing’s long-awaited guidance notes on Urban Development & Building Heights (which is on public consultation until September 24th) will inevitably delay some land sales as potential vendors take time to assess the likely implications of these new guidelines on proposed development projects.


  • The hotel and licensed sector of the Irish property market performed well over the Summer months, buoyed by good weather and exceptionally strong tourist numbers. Indeed, overseas visitor numbers to Ireland were up 6.7% year-on-year in the first half of the year according to Failte Ireland, with US numbers up 10.7% and European visitor numbers increasing by 10.2% in the period. In total, over 4.9 million visitors (more than the population of the Republic!) visited Ireland in the first half of 2018 alone and July was the busiest July on record.
  • Although only 11 hotel properties, totaling less than €265 million between them, changed hands in Ireland in the year to the end of August 2018, this masked underlying activity with several large transactions underway behind the scenes, which will significantly boost hotel sales volumes in the second half of the year when these transactions conclude.



  • Several high-profile Cork properties and land parcels are expected to be formally launched for sale over the coming months.
  • From an office occupier viewpoint, the recent announcement that Clearstream have agreed to lease 6,267m2 of accommodation at the Navigation Square office development in the city centre has been well received and will undoubtedly encourage other companies to focus on the competitive advantages that Cork offers to potential office occupiers, not least prime rents that are less than half the prevailing rate of Dublin. In another significant letting for the region, Voxpro recently agreed to lease 3,530m2 by way of an assignment at Block B, City Gate in Mahon, Co. Cork.
  • There has been a notable increase in demand for modern industrial & logistics accommodation in Cork over recent months with particularly strong appetite from third party logistics (3PL) companies and parcel delivery companies. Supply remains tight however, with less than 5,000 square metres under construction in the environs of the city at present. In addition to requirements from industrial & logistics occupiers, there is healthy demand from investors for well-located modern industrial investment assets in the region although supply remains limited, which in turn is supporting yield compression in this sector of the market. Signaling confidence in the sector, JCD Developments recently acquired 50 acres at Blarney Business Park.
  • Considering the relative affordability of land in Cork compared to prices being paid in Dublin, we expect to see a greater pool of buyers emerging for any Cork sites that are brought to the market over the course of the coming months.

Watch our video commentary by Marie Hunt, Head of Research, as she discusses our latest CBRE Ireland Bi-Monthly Research Report below.


About CBRE

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

CBRE U.C., (CBRE Ireland) registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company with offices in Dublin and Cork. Currently employing over 135 employees, we work with occupiers, investors and developers of office, industrial and logistic, retail, hotel and healthcare property, providing strategic advice and execution for property sales and leasing; tenant representation, corporate services; property and project management; appraisal and valuation; development services; investment management and debt advisory; business rates and compulsory purchase and research and consulting. Please visit our website at www.cbre.ie