Property market shows ‘signs of life’ in some areas

THE property market is not dead as there are encouraging signs evident in the commercial and occupier sectors.

That is according to property consultants CB Richard Ellis (CBRE), which said despite “all the doom and gloom” there was an increase in transaction volumes in recent months in some sectors of the property market.

It predicts there will be a “meaningful improvement” in transaction volumes in the investment and occupier sectors in the third quarter of this year.

CBRE is bearish, however, on the short-term prospects for other sectors of the market, such as development land, hotels and pubs, given, it said, the reliance of these sectors on a functioning debt market.

In particular there has been an increase in interest from international buyers in the investment sector.

CBRE said there is still demand for good properties offering secure income, demonstrated by six of the seven AIB bank branches offered for sale during the summer are changing hands for at or above their guide prices.

However, according to CBRE, now that demand is starting to emerge, there is limited availability of prime investment opportunities to satisfy these requirements.

CBRE managing director Guy Hollis said: “We have definitely seen renewed transactional activity in some sectors of the Irish property market in recent months and are encouraged that transaction volumes will improve over the course of the autumn.

“While rents and capital values remain under pressure, it is wrong to assume that the market is dead. The reality is that transactions are being negotiated in many sectors of the market and activity is picking up as economic projections improve.”

CBRE said a large proportion of the letting activity in the Dublin market is from companies vacating older premises to avail of better terms and conditions in other buildings.

Outside of the investment and occupier sectors of the property market, conditions remain very challenging, it said.

With no debt available and none likely to emerge in the development land sector for the foreseeable future, demand for land is restricted to a small number of cash buyers at present, according to CBRE.

It said it is difficult to envisage any improvement in the development land sector in the near term. It said the focus for the foreseeable future will be on the potential implications of the establishment of NAMA.

Meanwhile, Irish property prices could stay at half of their peak level for a decade, according to a report produced for ACC Bank, the Irish unit of Rabobank, which is opposing developer Liam Carroll’s court bid for protection from creditors. Mr Carroll’s lawyer Michael Cush read out the report in court in Dublin.