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Published in Commercial Property on 01/05/2019

Strong Activity Continues Across all Sectors of Property Market

CNI Editor reports

CBRE has released their latest bimonthly property market report for May 2019 as the traditional Summer selling season officially commences following what has been a relatively busy start to the year for Ireland’s commercial property market.

According to CBRE, investor demand remains robust and the volume of activity that is underway off-market in the investment, development & hotel sectors of the market is quite considerable. With some sizeable assets on the market and others due to be released for sale over the coming months, these sectors in particular are on track to record impressive transaction volumes in 2019 according to the property consultants.

According to Myles Clarke, Managing Director at CBRE Ireland, Transactional activity in the Irish investment market has continued at pace over recent months, buoyed by strong occupier market activity. Following the completion of almost €600 million of investment transactions in the first three months of 2019, a number of high-profile assets are currently being marketed, both on and off-market, including several office buildings and Build-to-Rent opportunities. For example, the Grade A Bishop’s Square office building in Dublin 2, which is mainly let to Government tenants and which has recently been extended and refurbished by Hines, is currently being marketed, guiding €180 million”.

Clarke’s comments were mirrored by Marie Hunt who said the volume of requirements for office space in the Irish capital has continued to rise over recent months with an all-time high of 370,000m2 of active requirements currently live.  Hunt also noted a large proportion of the office stock (47%) that is currently under construction in the capital has already been pre-let or is reserved, meaning that occupiers cannot afford to be complacent and put off location decisions in the hope that a large volume of stock will be available over the next two to three-year period


  • According to the most recent MSCI Irish Index, the Irish commercial property market achieved a total return of 7.8% in the year to the end of the first quarter of 2019 – a level of return that compares very favourably with returns from real estate in other jurisdictions and with returns from other forms of investment in this extended low interest rate environment.
  • Yields for shopping centres and secondary retail warehouses have softened a little further over recent months, mirroring a trend that is being experienced in the UK and across Europe at present. Meanwhile, prime office, industrial and multifamily yields in the Irish market remain stable but have potential to harden a little over the coming months as new transactional evidence materialises.


  • Following a very active first quarter, during which more than 107,000m2 of office accommodation was let in Dublin, the volume of requirements for office space in the Irish capital has continued to rise over recent months with an all-time high of 370,000m2of active requirements currently live.


  • While prime headline rental rates in Dublin remain stable at €700 per square metre, rents in the suburbs have experienced an increase over recent months with prime rents in the south suburbs of the capital now in the order of €317.42 per square metre (€29.50 per sq. ft), rents in the north suburbs at approximately €226 per square metre (€21.00 per sq. ft), and rents in the west suburbs trending at approximately €193.68 per square metre (€18 per sq. ft) at present.


Industrial & Logistics

  • Take-up in the Dublin industrial & logistics sector reached an impressive 95,623m2 in the first quarter of 2019, with 33 individual transactions signed in the three-month period. Although there are some new entrants, take-up is largely emanating from the expansion of existing companies across a range of different sectors, with a notable increase in requirements for large buildings of late.
  • A number of occupiers are now in the process of relocating out of Dublin Port, which is creating additional demand for serviced sites along the northern section of the M50.
  • In addition to the volume of stock transacted in Dublin during the first quarter of the year, there is a large volume of industrial & logistics accommodation reserved at present, which in due course will result in pre-lettings of new stock that is under construction in various locations around the M50.
  • Many developers are taking professional advice in advance of lodging planning for new schemes and additional phases of existing schemes to ensure they are developing industrial & logistics product that will satisfy end user requirements in terms of location, size, specification and fit-out.
  • Prime industrial rents remain stable at €106 per square metre (€9.85 per sq. ft) while rents for secondary and provincial industrial buildings have increased over recent months in line with the strong volume of demand being experienced in this sector at present.


  • There has been an encouraging volume of activity in the Irish retail property market of late with several new entrants including Oliver Bonus, Leon and PF Chang’s recently announcing plans to open their first Irish stores and several other international entrants expected to be confirmed over the coming months.
  • Ireland’s first new retail accommodation in years is now under construction with landmark developments such as Central Plaza and the Chatham & King development underway in Dublin city centre and new retail accommodation also under construction at Cherrywood in the south suburbs of the city. News that planning has recently been granted for an additional 83,996m2 of retail space at Carrickmines Retail Park in Dublin 18 has been well received, with this scheme expected to generate strong demand from a range of end users.
  • Grocery retailers are in expansion mode at present while demand from health & beauty sector occupiers remains selective but strong, particularly for units that have been previously fitted out. Meanwhile, the food & beverage sector remains active but primarily concentrated in prime locations and schemes that can deliver healthy footfall. 



  • The Build-to-Rent sector, while clearly not the panacea to Ireland’s housing crisis, nevertheless has a meaningful role to play in helping to address the country’s housing supply demand imbalance by providing much-needed rental accommodation & associated amenities. The sector has been receiving a lot of focus in recent months as the sheer scale of appetite for this form of investment (from investors and renters alike) has become increasingly tangible. Having accounted for 30% of overall investment spend in Ireland in 2018, this sector is on target to again account for a sizeable proportion of total investment in Irish real estate in 2019.
  • CBRE’s latest research shows that as much as €6.3 billion is now targetting the BTR sector in Ireland (up from €5.3 billion last year), with 32% of this capital emanating from the US, 24% from Europe, 22% being domestic and 12% from Canada. 
  • In addition to much-publicised demand for Build-to-Rent opportunities in the Dublin market, there is also strong demand for purpose-built student accommodation opportunities in Dublin, Cork and Galway although investment opportunities in this specialist sector are few and far between.
  • The Irish market has yet to see a grant of planning for a shared living/co-living concept although several promoters are in discussions with planners on this and CBRE expect to see some applications being lodged on sites in the postcodes of Dublin 6, 7 and 8 in due course.


Development Land

  • There have been signs of stabilisation emerging in Ireland’s residential land market over recent months, influenced by an easing in house price inflation as well as rising build costs.  Although transactional activity in the sector continues unabated (with €155 million of land sales having completed in the first quarter of 2019 alone in a combination of on-market and off-market sales), residential land prices appear to have started to stabilise, which CBRE say is welcome considering that deliverability and affordability are so topical at present.


  • The Central Bank’s macroprudential rules are impacting on pricing and absorption rates in the new homes market and in general, it appears that fewer parties are bidding on sites that are being marketed at present with those that are bidding primarily comprising traditional developers as opposed to speculators/land traders.


  • From an investment perspective, there has been considerable attention focussed on a mixed-use investment property at Half Moon Street on Lavitt’s Quay in Cork, which was recently launched to the market guiding €34 million. This high-profile institutional-grade asset is generating considerable interest from a range of Irish and international investors and is expected to be keenly bid.
  • There are increasing signs of development activity underway in the occupier sectors of the Cork market with 10 cranes now visible on the Cork skyline delivering high-quality office schemes, student accommodation and hotels. The volume of residential development activity is stark by comparison, pointing again towards the need for some additional supports or incentives to improve the viability of much-needed apartment construction in the city.
  • CBRE are experiencing strong interest in the largest development site to be offered for sale in 2019 so far in Cork – a 69 acre holding at Ballincollig, which is currently being marketed guiding €20 million.


  • Even though only 4 hotel sales, totalling approximately €36 million between them, completed in the Irish market during the first quarter of 2019, this masks the significant volume of transactional activity underway off-market at present. Several sales processes are now nearing completion, which will provide a welcome boost to transactional activity in due course.


  • Many unsuccessful underbidders on recent transactions are understandably frustrated at the shortage of prime hotel opportunities being offered for sale at present. With continuing strong trading conditions, and demand outstripping supply, now could be a very good time to sell hotels according to CBRE.