Commercial property rents expected to rise as sentiment improves, predicts SCSI

US/EU trade deal has removed a "significant" source of uncertainty

SCSI president Gerard O'Toole. The SCSI Mid-Year Commercial Property Review and Outlook Report 2025 expects that national average capital values and rents for prime industrial properties will rise by 2.5% over the next 12 months

Commercial property rents are expected to rise as occupier sentiment continues to improve, with the US/EU trade deal removing a "significant" source of uncertainty, a mid-year report for the Society of Chartered Surveyors Ireland (SCSI) predicts.

The SCSI Mid-Year Commercial Property Review and Outlook Report 2025 expects that national average capital values and rents for prime industrial properties will rise by 2.5% over the next 12 months, with high demand for logistics and distribution spaces.

Chartered commercial and valuation surveyors expect prime office capital values to increase by 2.1% and rents to increase by 2.6%. “We are seeing resilience in key areas particularly in the industrial segment, where demand remains robust, and in prime office and retail assets where quality and location are driving selective growth," said SCSI president Gerard O’Toole.  

Mr O’Toole said sentiment has shifted towards cautious optimism with most participants anticipating recovery rather than renewed decline. “Combined with previous sentiments of more stable credit conditions and valuations being viewed as closer to fair value, the market appears to be in an early recovery phase, with potential for continued capital appreciation alongside moderate rental growth. While the recently finalised US/EU trade deal has removed a significant source of international uncertainty, questions remain over the long-term implementation and impact of the agreement.” 

The SCSI research was carried out in June and July 2025, with figures collated from 100 responses from industry professionals.

For secondary industrial properties, only 34% expect capital values to increase, and 42% expect rental prices to rise. 

Fifty-four percent of surveyors expect the capital value of prime offices will increase, while 33% expect it to remain the same. In terms of rent for the prime office, 56% of surveyors anticipate an increase, whereas 34% expect the rent to stay the same.

Regarding secondary offices, only 14% of surveyors expect the capital value to rise, while the number forecasting a rise in rent is just 21%. 

For prime retail spaces, 34% of surveyors expect capital values to increase over the next 12 months, while 48% anticipate an increase in rental values. In contrast, for secondary retail spaces, just 16% of surveyors expect capital values to increase, 52% believe they will remain unchanged and 32% believe they will decrease. The corresponding figures for rents are 18%, 57%, and 25%.

Bernadine Hogan, chair of the SCSI Commercial Agency Committee, said that chartered surveyors noted strong growth potential in essential service-oriented and residential sectors. “Student housing stands out with the highest projections, anticipating rental growth of 4.5% and capital value appreciation of 4.9%, driven by strong demand and constrained supply."

Hotels are forecasted to have the most modest growth, with rental increases of just 1.9% and capital values slightly lower at 2.1%, indicating a cautious recovery in the hospitality sector. 

The survey findings indicate almost two thirds of businesses may scale back their office footprint slightly over the next two years.

Corporate and social responsibility considerations are expected to be increasingly important, with 86% of respondents expecting tenants will demand enhanced health and well-being features. “In a market characterised by a national commercial vacancy rate of 14.5%, tenants are in a strong negotiating position," said Ms Hogan.