Commercial Property Market Has Moved Up A Gear After Slow Start To The Year

Dublin, May 1st 2017 - Commercial property specialists CBRE today released their May bi-monthly report focusing on recent trends and transactions in all sectors of the Irish commercial property market.

The property consultants say that activity has gathered pace in the Irish commercial property market over recent months following what was a relatively slow start to the year. Investor demand remains strong and encouraged by activity in the various occupier markets, to the extent that the property consultants expect to see some price sharpening for prime investments over the coming months.

According to CBRE, investment spend is down year-on-year due to a relative shortage of product compared to the large volumes traded in recent years.

To download a copy of the full report please click here

Marie Hunt, Executive Director and Head of Research, CBRE Ireland
“Now that new supply is starting to be delivered and some office buildings vacated as occupiers move to new premises, availability has improved somewhat in the Dublin office market. As a result, occupiers are taking longer to make location decisions. Nevertheless, office take-up is continuing at a healthy pace and with several large transactions due to sign later in the year, the market is on target for another year of healthy activity. The underlying strength of occupier activity is in turn continuing to encourage investors although the shortage of traditional investible stock is encouraging some investors to focus on funding opportunities and investment in alternative sectors”. 
Marie Hunt, Executive Director and Head of Research, CBRE Ireland

According to CBRE, the scarcity of housing in the Dublin market is the biggest issue facing the industry in the short to medium term. Commenting on this trend,

Tim MacMahon, Director, Development Land
“We are urging Government to step up their efforts in this respect, to abolish VAT on new home construction and to facilitate the delivery of the Build to Rent (BTR) concept, which is common in other jurisdictions and which has the ability to deliver scale quickly. We are also urging all landowners and stakeholders to release more land for sale to 
Tim MacMahon, Director, Development Land


  • A robust 50,000m2 of office leasing transactions was signed in Dublin in the first quarter of the year in 40 individual transactions. Encouragingly, another 50,000m2 of accommodation was listed as reserved at the end of Q1, which bodes well for take-up in the capital in Q2.
  • CBRE expect the vast majority of take-up in the Dublin office market in 2017 to occur in the second half of the year on the basis that many of the larger requirements for accommodation that are currently active are unlikely to translate into completed transactions until later in the year.
  • Several Brexit-related mandates remain active although the surprise election in the UK next month may now see some of these decisions being delayed somewhat.
  • Occupiers now have clearer visibility on future supply and are therefore under less pressure to make location decisions quickly.
  • There has been a notable increase in interest in forward funding opportunities since the beginning of the year and we are likely to see some new forward funding transactions announced over the course of the coming months.

Industrial & Logistics

  • Occupiers in the industrial and logistics sector continue to be frustrated by the scarcity of modern facilities along major road networks in the Dublin region, with take-up remaining constrained as a direct result.
  • In total, approximately 50,000m2 of industrial take-up was recorded in Dublin in the first quarter of the year, which was down approximately 28% on the same period last year.
  • Considering the scarcity of modern accommodation along major road networks in the capital, news that Mountpark Logistics EU have now obtained planning permission and are due to commence construction later this Summer of a purpose-built logistics hub at Baldonnel on the N7 has therefore been broadly welcomed.
  • Of the €492 million invested in Irish income-producing assets with a value of more than €1 million in Ireland in Q1 2017, 8.5% or just over €42 million comprised industrial investments specifically.


  • In addition to the length of time it is taking to get transactions across the line, the biggest challenge in the retail sector continues to be a scarcity of stores to match volumes of occupier demand for established schemes and prime high street locations.
  • Some UK retailers are putting location and expansion decisions on hold in the short term in light of Brexit and the impending UK election.
  • There is strong demand at present for premises from service occupiers, food and beverage operators and those specialising in beauty.


  • In total, approximately €492 million was invested in 55 income-producing assets with a value of more than €1 million in the first three months of 2017 compared to €735 million invested in the same period last year.
  • Considering the dearth of prime investment opportunities being offered for sale at present, there has been a shift in the dynamic to some extent with an increasing number of investors now exploring funding opportunities as well as investment in alternative sectors.
  • Prime yields in all sectors remain stable but CBRE expect to see some further tightening for prime office and retail investments over the coming months.


  • There is a severe scarcity of land on the market, which is leading to pent-up demand for any sites that are being offered for sale. CBRE are urging landowners and other stakeholders to take advantage of the weight of frustrated capital that is currently looking for opportunities to participate in addressing the severe housing shortage by releasing land parcels to the market.
  • The Build to Rent concept, which is well established in other jurisdictions but still at an embryonic stage in the Irish market, has the ability to deliver much-needed scale in the quickest possible timeframe. Providing Build to Rent schemes is an obvious solution to the housing crisis, particularly considering that renting has overtaken home ownership to become the predominant form of housing tenure in urban towns and cities in Ireland. There is strong appetite from funders, developers and investors alike to deliver Build to Rent.


  • There were very few hotels formally launched for sale in the first few months of the year (only 7 hotels, with a total value of approximately €26 million traded in the first quarter of 2017). However, this situation has now improved with several larger hotels launched for sale in recent weeks.
  • According to research compiled by CBRE, there are now 9,075 hotel bedrooms at various stages of the planning process in the Greater Dublin Area. The property consultants predict that 5,700 of these are due for completion between 2017 and 2021. However, only approximately 300 of the 1,300 hotel rooms currently under construction in the capital are likely to be completed before year-end 2017 according to CBRE.

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 2016 revenue). The company has more than 75,000 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., registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company, now employing over 132 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, business rates and compulsory purchase, valuations and research. Please visit our website at www.cbre.ie.