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Published in Commercial Property on 02/05/2017

Brexit Inquiries Continue to Rise

#Brexit #scsi

CNI Editor reports

The volume of enquiries from UK-based businesses seeking to relocate to Dublin is on the rise, according to the findings of the latest quarterly commercial property monitor from the Society of Chartered Surveyors Ireland (SCSI).

Nearly two-thirds (64pc) of Dublin-based respondents to the latest survey now claim to have seen evidence of companies considering the move from the UK to Dublin.

The figure represents a significant increase from the previous quarter when 50pc of contributors claimed to have seen evidence of interest in the capital from the UK.

The finding would appear to bear out recent commentary from a number of the country’s leading commercial property agents in relation to the uptick in enquiries from firms seeking to relocate their operations in the wake of Brexit.

In comments accompanying JLL’s latest quarterly report on the performance of the Dublin office, JLL head of research, Hannah Dwyer, noted that the “initial flurry of enquiries” which had come from London-based companies in the wake of the Brexit referendum last June had now “picked up momentum with companies now making site and building visits over to Dublin and undertaking due diligence”.

She added: “JLL is working with a number of clients who are seriously considering a move to Dublin as part of their strategy, so enquiries are now translating into real post-Brexit activity.”

That interest, coupled with the ongoing and more general recovery in the economy, is reflected elsewhere in the SCSI survey which covers the three-month period to the end of March. The report’s other findings point to continued robust growth in occupier demand across the board, with the pace of increase accelerating in each area of the market.

Looking at the next 12 months, respondents to the survey, which the SCSI produces in conjunction with the Royal Institute of Chartered Surveyors (RICS), anticipate further significant growth across all sub-sectors of the commercial real estate market. While rents in prime locations are expected to outperform, the gap has narrowed within the last quarter with upward revisions seen across secondary space.

When broken down, the results for Dublin are slightly more elevated compared to the national average, bolstered by the secondary office sector displaying noticeably stronger projections.

In terms of the investment market, the SCSI report shows that enquiries within the sector rose at a “healthy pace” in the first quarter with growth evenly distributed across each sector.

Unsurprisingly, the supply of property for investment purposes fell once more, extending a run of successive quarterly declines stretching back to early 2015.

Capital value expectations for the year ahead point to significant growth in each area of the market. While projections were little changed at the headline level, upward revisions to office and industrial expectations (both prime and secondary) were offset by slight downgrades for the retail sector. Projections for capital value growth in Dublin once again slightly outstrip the national average.

A majority of contributors to the survey (53pc) are now of the opinion that conditions in their local market are consistent with the middle stages of an upturn (a small increase on 45pc in Q4 of 2016).

And 63pc of respondents believe that commercial real estate is fairly-valued at present. There was a slight decline in the percentage of contributors who view the market as being underpriced (from 20pc to 15pc).

The latest quarterly Global Commercial Property Monitor from the RICS delivers a positive finding for Dublin in terms of the city’s bid to attract post-Brexit relocations.

According to it, Dublin and Amsterdam are leading the way in seeing enquiries for space from businesses looking to relocate some part of their business away from the UK.

The RICS global survey also shows Dublin has one of the highest expectations in terms of 12-month capital value and rental values.

Sunday Independent