Signs of the re-emergence of the commercial property sector which have been evident in Dublin are finally beginning to appear in other regions as the pace of provincial transactions starts to gather pace.
The recovery is rearing its head across all segments of the market including retail, office and industrial properties although the Dublin market remains clearly ahead of the other major urban centres.
Among the major industrial deals concluded recently are the sale of the former Dell factory in Raheen, Co Limerick, for a reported €6m, as well as the acquisition of land to accommodate the expansion of Vistakon in the same city.
CBRE warned, however, that as rental values increase further in Dublin the first signs of speculative development are likely to emerge by the beginning of next year.
The past two months have also seen a number of significant retail premises being taken up including cosmetics brand Inglot opening its second Cork store on Oliver Plunkett St and Maxi Zoo expanding its Irish footprint with an additional outlet in Newbridge, Co Kildare.
In the capital, demand has been sustained too with HMV re-opening on Grafton St in the former Karen Millen premises and fashion chain Vero Moda joining it on Dublin’s main thoroughfare.
“The retail backdrop in Ireland has continued to improve over recent months and, at the mid-year point, there is clear evidence that the recovery first experienced in Dublin is beginning to manifest outside of the capital, with healthy levels of demand for good provincial shopping centres and certain provincial high streets now emerging,” said CBRE Ireland executive director Marie Hunt.
Despite a slight weakening of demand in the capital in the past two months, prime office rents now stand at €538 per sq m with those in the southern suburbs coming in at just shy of €270 per sq m.
Meanwhile, a separate report from estate agents Savills also points towards a broadening recovery with 52% of deals over the past three months completed outside of Dublin, including the acquisition of Cork’s One Albert Quay which is still under construction.
The report also suggests the country’s exceptionally strong level of commercial property investment is on course to replicate last year’s record €4.5bn worth of deals.
“The first six months of 2015 has been positive, not only because of the overall level of activity, but also because of the breadth and depth of market demand,” said Savills director of investments Fergus O’Farrell.
“We now have a wider and more diverse buyer pool to sustain the market with significant levels of turnover and volume.”
That more diverse pool of buyers include the arrival of a number of German funds such as Patrizia, Union Invest, and Real IS, all of whom finalised their first Irish acquisitions during the opening months of 2015.
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