Busy Start To The Year For Ireland's Commercial Property Sector

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Dublin, 1st March 2018 – Commercial property specialists CBRE today released their first bimonthly report for 2018, focussing on trends and transactions in all sectors of the Irish commercial property market during the first two months of the year and their outlook for the months ahead.

Marie Hunt, Executive Director and Head of Research, CBRE Ireland
All sectors of the Irish commercial property market have had a busy first two months. In addition to a carryover of transactions from 2017, some of which completed during January and February, there has been considerable work underway in each sector of the market, preparing assets that will be offered for sale over the coming months.  We now enter the traditional Spring selling season and are expecting considerable activity both from an occupier and investor viewpoint
Marie Hunt, Executive Director and Head of Research, CBRE Ireland


  • Following a year in which more than €2.5 billion traded in the Irish investment market and total returns reached 6.4% according to the MSCI Irish Index, the opening months of 2018 has seen several transactions carried over into the new year, some of which have now signed or are close to completing.
  • The supportive economic backdrop and strength of underlying occupier market activity continue to attract investors from a range of jurisdictions, with Ireland’s comparatively attractive yield profile also encouraging investors to consider opportunities in the Irish market.
  • Although sourcing core product and deploying capital remains challenging, a number of assets have been formally released for sale since Christmas (both on and off market) while others are being prepared for sale later in the year, which should alleviate supply pressures somewhat.
  • Prime yields in all sectors remain stable at this juncture although some further strengthening is expected in multifamily/Build-to-Rent yields over the coming months as new evidence materialises. Logistics yields remain at a premium over other real estate sectors although supply of investment product in this sector remains constrained, particularly for larger lot sizes.
  • Any Build-to-Rent opportunities that are brought to the market are likely to be particularly keenly bid.


  • Following a year in which transactional activity in the hotel sector was constrained by a shortage of product, particularly in the Dublin market, CBRE expect to see significant improvement in this situation in 2018 with several high-profile hotel properties expected to be offered for sale (both on and off market) from the end of Q1 onwards.
  • Approximately 1,500 new hotel bedrooms are expected to come on stream in Dublin during 2018.


  • Following a bumper year in 2017 in which more than 331,000m2 of transactions were recorded, the first two months of 2018 has seen continued momentum in the Dublin office market. Several transactions that carried over into 2018 have been signed in recent weeks while others are nearing completion and will provide a welcome boost to Q1 take-up volumes. Demand remains robust with a number of new requirements having materialised since Christmas, copperfastening already strong requirement volumes.
  • In line with the year just gone, 2018 is likely to be largely characterised by the expansion of existing occupiers as opposed to take-up by large-scale new entrants. CBRE also expect to see some further Brexit-related moves solidifying over the course of the coming months.
  • The increase in large requirements activated over recent months (many of which don’t need to move into new premises for a number of years yet) as well as the completion of a number of significant pre-lettings in recent months, has in turn provided the impetus for the next wave of development activity to commence in the capital.
  • According to CBRE research, the extent of new office supply coming on stream over the next three years appears well controlled at this point with funding for speculative development remaining elusive despite the current underlying market dynamics.

Industrial & Logistics

  • Having achieved take-up of almost 250,000m2 in the Dublin market last year, 2018 has started well in the industrial and logistics sector with robust demand for premises and land, although a scarcity of modern supply along key road corridors continues to frustrate.
  • With only a handful of speculative developments under construction, demand remains strong for ‘build-to-suit’ opportunities, particularly for premises extending to more than 6,000m2.
  • Based on activity levels since Christmas, we expect to see more supply coming available over the coming months with a number of properties and industrial landbanks expected to be formally brought to the market in due course, which will alleviate pressure to some extent.
  • Occupiers and investors continue to watch Brexit negotiations closely on the basis that the ultimate outcome is likely to result in significant changes to inland distribution and logistics in the Irish market, which to some extent is changing anyway as the growth of ecommerce shapes supply chains.


  • A number of transactions are currently in negotiations on Grafton Street and are likely to complete over the coming months. This will see the street revert to full occupancy and set a new tone for Zone A rents in the capital.
  • With recent data showing the extent to which Irish consumers are now shopping online and with more than 60% of this spend going overseas, the need for Government focus on online leakage is becoming increasingly important.

Development Land

  • We expect several sizeable land parcels and development opportunities to be brought to the market over the coming months and there is no doubt but that these will be keenly bid considering the dearth of supply over recent years.
  • The market is waiting patiently for clarity from the Minister for Housing on new standards on design and density after which we expect to see a meaningful increase in planning activity and in turn much-needed development. However, as several commentators have pointed out recently, regardless of how much land is brought to the market or how many latent planning permissions are in place, unless land has adequate services and infrastructure to facilitate development, delivery cannot materialise.
  • The Government’s recent launch of the National Planning Framework 2040 and National Development Plan to 2027 setting out priorities for regional development has particular resonance for the real estate market. It is now imperative that the ambitious (albeit necessary) initiatives announced in these plans are delivered in a timely and efficient manner.
  • CBRE Research suggests that there is as much as €5 billion specifically targeting Build-to-Rent opportunities in the Irish market with the vast majority of this capital chasing opportunities in the Dublin market. Having said that, the Elysian opportunity in Cork, which is now reportedly under offer to Kennedy Wilson, was keenly bid, demonstrating investor appetite for core product in key population centres other than Dublin.


  • Reacting to the current strength of demand from both domestic and overseas bidders for good investment opportunities in Cork city and region, CBRE expect to see an increase in the volume of investment assets being released for sale over the coming months.
  • Despite the volume of office stock at various stages of the planning process, only 14% of the total potential pipeline in Cork is currently under construction. In total, only 34,479m2 (370,994m2) of new stock is currently under construction in Cork of which almost one quarter has already been pre-let/accounted for. While the pipeline of new office schemes gives potential occupiers some comfort, the lack of standing stock at present is posing a huge challenge for companies whose space requirements are more immediate.
  • The Government’s recently released Project Ireland 2040 report has particularly positive ramifications for Cork, envisaging a 60% increase in Cork’s population over the next two decades and significant improvements to infrastructure in the city. The assertion that ‘a quarter of Cork’s footprint has yet to be built’ suggests that the Docklands region of the city will have a vital role to play in facilitating future growth.



About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), 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