Ireland’s office market is likely to be the country’s most active property investment sector in 2019, according to Marie Hunt, executive director and head of research at CBRE Dublin.
The market has been buoyed by a lively occupier market and the firm says 2018 was the second consecutive year where the Dublin office market achieved record performance, boosted by several strategic transactions.
‘While the long-term sustainability of office demand is never certain, considering the volume of outstanding requirements for office accommodation in Dublin at this juncture, there is every likelihood that it could be threein-a-row in 2019, with office take-up in the Irish capital on course for another strong performance,’ Hunt stated at the launch of the firm’s annual report Outlook 2019.
‘However, we are now another year deeper into the cycle and there are an increasing number of clouds on the horizon, not least Brexit, which has the potential to dent confidence and impact negatively on Irish economic performance,’ Hunt added.
As Brexit continues to loom large, CBRE said it expects to see more European funds looking to invest in stable markets such as Ireland. More Asian capital can be expected to be invested in the Irish market in 2019, with buyers including new Singaporean investors.
CBRE believes there is scope for yield compression in some sectors of the Irish market, notably prime offices, prime build-to rent residential, hotels and industrial. ‘This is at odds with many other locations in Europe where yield compression is unlikely at this point in the cycle,’ it said. And apart from offices, ‘sheds and beds’ will keep the market on its toes in 2019.
‘As distribution channels evolve to service the growth of ecommerce and streamline supply chains in anticipation of Brexit, this is driving demand for industrial investment opportunities,’ the report concluded.
This story was first published in PropertyEU's sister publication, EuroProperty.