Summary of “The Commercial Property Review & Outlook 2014”
A Summary of the Commercial Property Review & Outlook 2014 published by the Society of Chartered Surveyors Ireland (SCSI).
Offices
The office sector in Dublin is leading the way in the Irish Commercial Property Market. The SCSI Commercial Property Review & Outlook 2014, published in conjunction with Amárach Research, confirms that prime office rents in Dublin are between €350 per square metre and €377 per square metre in Quarter 1 2014 based on improved activity levels at the end of 2013 and start of 2014. There was a 23% increase in office take up in 2013. While the turnaround was mainly driven by Dublin’s office market, improvements in the Irish economy in the second half of 2013 led to growth in both the retail and industrial sectors by the end of Quarter 4. The vacancy rate for prime office space has fallen close to 9%, and two thirds of Chartered Surveyors expect the supply of prime office space in Dublin to decrease significantly over the coming 12 months.
Industrial
Take-up in the industrial sector increased by 18% in 2013 and rents remained steady in 2013. Although there is an oversupply in certain locations, there is increased demand for prime industrial space, in particular by online companies with a greater need for modern logistics and distribution centres. Industrial prime rents have remained steady in Dublin at €61 per sq.m. per annum. Industrial rents increased in all categories in Leinster.
Retail
Rents for prime retail in Dublin continued to fall in 2013 and are now just above the €4,000 per square metre per annum mark. Rents for major town centre style malls showed a marginal decrease, indicating that rents in this sector have stabilised. Rents for prime retail increased in Leinster and are now at €325 per square metre, an increase of 7.3%. Rents for prime retail continued to fall in Munster in 2013 reflecting tough trading conditions in Cork City, Limerick City and Waterford City. On the other hand, rents increased across most retail categories in Connaught/Ulster in 2013, possibly reflecting more buoyant conditions in Galway City.
Investment
Approximately €1.9bn was invested in the Irish property market in 2013, which is three times more than in 2012. According to a report on Emerging Trends in Real Estate Dublin is the top spot in Europe for new investments in 2014. This is attributed to Ireland’s economic turnaround, falling unemployment and a forecast GDP growth of 2% in 2014, as well as the perception that prices have bottomed out and are beginning to recover. The main demand was for large office properties and growth was also recorded for industrial and retail properties.
Over half of investment spend in 2013 came from international investors with strong demand from the US, Europe and Asia. This is set to continue as an international report ranked Dublin as the number one location in Europe for new investment in 2014. This predicted growth is based on Ireland’s economic recovery.
Development Land
Non-agricultural land sales were up four fold between 2012 and 2014. This activity in Dublin is being driven by the improving office market and the increasing demand for family homes in the residential market.
For full report please go to www.scsi.ie/commercialreport2014
