Today’s latest decisions by the European Central Bank (ECB) and the Bank of England to cut their benchmark interest rates by 50 basis points to 1.5% and 0.5%, respectively, were received positively by CB Richard Ellis, Ireland. These most recent rate cut continue one of the few encouraging trends in commercial property after the investment market was brought to a virtual standstill by the effects of the credit crunch and banking crisis in 2008. However, in the absence of actual funding to support transactions, interest rate movements have had little impact on transactional levels.

Guy Hollis, Managing Director of CB Richard Ellis in Dublin, said: “In terms of yields versus cost of money, the framework is in place for some recovery in commercial property, but unfortunately the continued difficulty in sourcing funding for transactions is exaggerating the downturn. While in 2008 capital value falls were driven largely by changes in yields, going forward we are likely to see increased pressure on values due to a more negative outlook with regards to rental growth.”

Patrick Koucheravy, Property Economist with CB Richard Ellis in Dublin, said: “Considering the increasingly bad news emanating from the Euro zone regarding employment, consumer spending, investment and output, the reluctance on the part of the ECB to cut rates more aggressively is disappointing, especially given that inflation – their chief concern – has receded considerably. While the ECB may be worried that going too low too fast would limit their monetary options in the future, the ECB looks too cautious when compared to the aggressive monetary policy decisions in the UK and US.”

This week CBRE launched their March Bi-Monthly market update on the Irish commercial property market, which stated that conditions remain difficult across all sectors of the commercial property market. Despite the re-pricing that has occurred over the last 18 months, transactional activity remains subdued. Guy Hollis said that while all parts of Ireland have been affected, Northern Ireland had been somewhat more insulated from the downturn than the Republic.

For Further Information, please contact

Patrick Koucheravy Guy Hollis
Property Economist Managing Director
CB Richard Ellis CB Richard Ellis
Tel + 353 1 6185561 Tel + 353 1 618555783
Email patrick.koucheravy@cbre.com Email guy.hollis@cbre.com
Mobile - + 353 87 2374121

About CB Richard Ellis
CB Richard Ellis Group, Inc. (NYSE:CBG), an S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2007 revenue). With over 29,000 employees, the Company serves real estate owners, investors and occupiers through more than 300 offices worldwide (excluding affiliate offices). CB Richard Ellis offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. In 2007, CB Richard Ellis was named one of the 50 “best in class” companies by BusinessWeek, and one of the 100 fastest growing companies by Fortune. In Ireland, CB Richard Ellis is the country’s largest and fastest growing commercial real estate services company, now employing over 110 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, project management, consultancy, valuations and research. Please visit our website at www.cbre.com