Stable interest rates and resilient growth set to unlock Irish property investment, says Savills

Estate agent said European investors were the most active buyers, followed by US and Irish buyers respectively

Institutional Capital Dominates, SCPI Funds Expand Institutional investors accounted for 62% of acquisitions in 2025, their highest share on record. Picture: Larry Cummins

Irish commercial property investment volumes are forecast to increase in 2026 as stable interest rates and resilient economic growth combine to unlock activity across the market, estate agent Savills has said.

In its latest Ireland Investment Market review and outlook for 2026, Savills said total investment activity last year reached €2.4bn, which was broadly unchanged year-on-year and 40% below the 10-year average of €4.0bn. 

However, it noted momentum strengthened in the final quarter, with almost €800m transacting in the last three months alone. Savills expects this improving trajectory to continue through 2026.

“One the most promising aspects of the current market is the stability of the interest rate outlook," said John Ring, Director of Research at Savills Ireland.

"This helps the market to arrive at a consensus, narrowing bid-ask spreads and facilitating deal flow."

Mr Ring said this was in sharp contrast to the volatility witnessed between 2022 and 2024, when repeated inflation adjustments led to uncertainty regarding interest rates and hamstrung activity. 

Institutional Capital Dominates, SCPI Funds Expand Institutional investors accounted for 62% of acquisitions in 2025, their highest share on record. Meanwhile, European investors were the most active buyers, responsible for 36% of purchases, followed by US and Irish buyers at 25% and 24% respectively.

French SCPI funds were particularly influential in the €20m to €50m segment, where they accounted for 35% of activity in 2025, and 27% of deals between €5m and €10m. Their investment reached a record €342m, up 30% year-on-year.

Retail was the largest sector by market share for the second consecutive year, accounting for 30% of volumes, ahead of its 10-year average of 21%. 

Offices recovered to 27% of volumes, up from 20% in 2024, while residential accounted for 24% - from 18% - driven by a partial recovery in PRS and PBSA investment.

Savills also said Ireland’s commercial property market has undergone a structural transformation, shifting from a domestically concentrated capital base to a more geographically diversified ownership structure. Institutional investors were the largest net purchasers over the period, with a net position of €8.4bn followed by private equity at €6.1bn.

Economic conditions

Furthermore, Modified Domestic Demand (MDD) grew by an estimated 3.9% in 2025, underscoring the resilience of the domestic economy despite global uncertainty, Savills said. Meanwhile, Ireland’s sovereign bond spread over Germany tightened to just 20 basis points at year-end, reinforcing investor confidence in Ireland’s fiscal position.

“We are seeing the foundations for a more active year ahead," Kevin McMahon, director of investments at Savills Ireland said.

"There is capital ready to deploy, particularly from institutional and continental European investors, and the return of larger lot sizes is encouraging."

Savills said the market structure today is fundamentally more resilient than it was before the global financial crisis, with ownership more diversified by geography and investor type, and that depth of capital supporting liquidity as sales by private equity materialise.

"While volumes remain below long-term averages, the combination of stabilised forward rates, increased sales supply and a diversified institutional capital base provides a very positive backdrop for Irish investment markets in 2026," the company concluded.