CBRE predicts development wave

A marked return of cranes to the Dublin skyline and a 15% jump in prime office rents are anticipated this year, as momentum picks up in the commercial property market.

CBRE predicts development wave

Leading commercial property consultancy, CBRE is expecting a fresh wave of office development to engulf the capital this year, with prime office rents in Dublin 2 and Dublin 4 — which rose by over 25% last year — to rise to about €435 per square metre or €40 per square foot by year end.

Previewing likely trends for 2014, CBRE Ireland said yesterday there should also be strong activity in the retail property market; with existing retailers expanding and relocating and several new international names entering the market.

The momentum is also unlikely to be just focused on the leading shopping centres and prime high street locations, with secondary street and provincial locations also set to benefit.

The record levels of transactional activity seen in the industrial and logistics sector in Dublin last year, are expected to be matched or exceeded this year; with more real estate investment trusts also likely to be set up.

Last year’s highlights for the capital included a 25% increase in office take-up to 170,600sq m and a near 4% decrease — to 15.33% — in the overall vacancy rate in the office market. In all, there were 96 investment property transactions of over €1m in value in the overall market, a near 100,000sq m increase in industrial space take-up in Dublin and 33 hotel sales concluded at a combined investment of €160m; compared to 24 in 2012, worth a combined €146m.

According to Enda Luddy, managing director at CBRE Ireland, 2013 marked “a major turning point” for the Irish economy and, in turn, its property market.

“Although there are several legacy issues still to be tackled and our economy remains susceptible to macro-economic developments, 2014 is shaping up to be an even busier year for the Irish commercial property market than last year, fuelled to a large extent by improving domestic economic indicators and by some improvement in the availability of debt funding.”

A further significant number of hotels in the centre of Dublin are expected to go up for sale this year, as well as some upmarket provincial ones; as demand from overseas buyers continues.

Dublin is also likely to see a notable increase in housebuilding volumes during the year, CBRE said, while a “significant amount” of provincial land is to be traded between local parties.

CBRE’s executive director and head of research, Marie Hunt also noted that technological work-trend changes — such as remote working and hot-desking — are changing the way occupiers use buildings.

“It is now vital for owners, occupiers, and investors to keep abreast of emerging trends to preempt how real estate will be planned, designed, developed, occupied, owned, and managed over the coming years and decades,” she said.

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