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‘Polarisation a key trend in the Irish commercial property sector in 2013 say CBRE’

Dublin, 10th January 2013 – Commercial property consultants CBRE today released their Outlook 2013 report, forecasting likely trends in all sectors of the Irish commercial property market for the year ahead. While the property consultants are bullish about the prospects for prime property in 2013 considering the weight of demand from a range of international investors for opportunities in the Irish market, they are more sanguine about prospects for secondary and provincial properties which they say will take longer to unwind.

Please see link further below to download the full Outlook 2013 Report.

CBRE’s Top 10 Predictions for 2013
1. Properties will continue to come to the market on a relatively controlled basis over the course of 2013 with the deleveraging process continuing but at a continued slow pace.

2. There will be more loan sales activity in 2013 as banks continue to deleverage their property holdings, while we could also see the disposal of some of the underlying securities that were sold by way of loan sales during 2012.

3. International investors will continue to focus their attention on prime office, retail and residential portfolio opportunities, primarily those in core locations in Dublin while domestic investors will be the most dominant purchasers of secondary and provincial investments, some of which are likely to continue to experience further outward yield shift over the course of 2013 considering the likely depth of cash buyers. In contrast, the weight of money chasing prime investment opportunities in the Irish market has the potential to generate some further yield compression in the office and retail sectors during 2013 despite the fact that short term rental growth projections remain relatively flat.

4. Many international investors in the investment and hotel sectors have the potential to bring funding with them from outside the jurisdiction which will be a significant boost for liquidity in the Irish market.

5. There is potential for some limited rental growth to emerge at the prime end of the office and retail sectors in 2013 although for the most part, rents are likely to remain relatively stable over the course of the next 12 months. The level of incentives such as rent free periods for prime buildings could move in a little as the year progresses.

6. An increase in the number of refurbishment projects is expected this year but no new speculative office development is expected to commence in 2013 on the basis that rental and capital values are not yet at a level which would render development viable. We are getting closer to this position in prime locations in Dublin 2/4 but speculative development is not on the horizon for secondary and provincial office locations at this point.

7. With ever-increasing volumes of retail business being conducted online, Irish retailers are expected to focus considerable effort in 2013 on developing their online and multi-channel offer.

8. Some international buyers could emerge for strategic sites in Dublin that offer the potential for office and/or residential development in the medium term.

9. More hotel properties will be being brought to the market and some of the NAMA banks will also start to offload hotel properties. There is likely to be a notable increase in the volume of pub properties being offered for sale over the course of 2013 with the buyers for these properties being predominantly local. Fewer hotel properties are expected to go into receivership this year although there is likely to be an escalation in the number of enforcements in the pub sector.

10. The one area where costs have not rebased is commercial rates and this is likely to be the focus on more attention than rental costs during 2013.

According to Marie Hunt, Executive Director and Head of Research at CBRE “A busy year is in prospect in the Irish commercial property sector in 2013 as the wreckage is cleared away and we move into a recovery phase for the economy and in turn for the property market. However, the prospects for prime property are considerably better than secondary with increased polarisation likely to be a key trend in 2013”.

ENDS

For further information:
Marie Hunt – 00 353 1 6185543 / 00 353 87 2727115 or marie.hunt@cbre.com

About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2011 revenue). The Company has approximately 34,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.

In Ireland, with offices in Dublin and Belfast, CBRE is the country’s largest commercial real estate services company, now employing over 110 employees and offering a full range of property services including property sales and acquisitions, leasing and management, investment, corporate services, debt advisory, project management, consultancy, valuations and research. Please visit our website at www.cbre.ie. or www.cbre.ie.ni.


Ireland ViewPoint January 2013 ( 3.83MB )

Published on: 10 01 2013