May 1, 2022

Dublin, Sunday May 1st, 2022 Commercial property specialists CBRE today released their May bimonthly report, commenting on trends and transactions in all sectors of Ireland’s commercial property market. According to the property consultants, all stakeholders in the Irish commercial property market are acutely mindful of the prevailing geopolitical backdrop and inflationary pressures that have escalated over recent months, but the Irish commercial property market continues to perform well regardless. CBRE say that the most tangible impacts to date include rising inflation, supply chain disruption and an increase in the cost of capital in response to potential interest rate rises in due course.

According to Marie Hunt, Head of Research & Consultancy at CBRE Ireland, Uncertainty around build cost inflation, which in Ireland’s case is compounded by lengthy planning delays in some cases, is the primary concern across all property market sectors. This is likely to impact negatively on delivery timeframes and ultimately supply in certain sectors of the market. This will accentuate already severe supply demand imbalances in some sectors, not least in the housing sector. It must be remembered that property has historically proven to be a good hedge against inflation and that even though there has been an upward movement in bond yields in the Irish market over recent months, there is still a very attractive spread between 10-year-bond yields and real estate yields, which augurs well for the sector. Prime rents in both the office and industrial & logistics sectors have increased quarter-on-quarter. We continue to see strong liquidity in the market with encouraging volumes of both occupier and investment activity recorded across all sectors in the first four months of the year. More importantly, there are a lot of deals at various stages of negotiation in all sectors, which will provide a welcome boost to transactional activity over the Summer months and beyond”.


  • In addition to the completion of more than 45,000 square metres of lettings in the capital during the first quarter of the year, more than 107,500 square metres of office accommodation was reserved at the end of Q1. Meanwhile, demand is currently trending at more than 285,000 square metres with active requirements for both single-let and multi-let properties in evidence.
  • The overall vacancy rate in Dublin declined again last quarter to 8.2%. In addition, several of the office schemes that are currently under construction are now partly or fully reserved or pre-let. Ensuring consistency of supply of modern office accommodation to service the volume of job creation being experienced in the Irish market will therefore come under increased focus, particularly now as uncertainty on build cost inflation and supply chain concerns are likely to impact on the timing of delivery of some schemes.
  • The rate of rental growth in the Dublin office market in the year-to-date has surpassed expectations with prime headline rents for new high-specification ESG-compliant buildings in the city centre now in the order of €646 per square metre or €60 per sq. ft. Developers that have opened up new buildings to facilitate floor-by-floor lettings have in some instances achieved a premium to these headline rental levels.



  • As the Summer season approaches and business and tourist activity gather pace, hoteliers are more confident than they have been for some time with visibility on future bookings improving significantly. While occupancy rates and other performance metrics still remain below the record levels experienced before the outbreak of Covid-19, they are showing continuous improvement month-on-month, boosted in some cases by demand from the State and other organisations to house long-term residents including most recently large numbers of Ukrainian refugees.
  • Dublin and other cities are expected to return to stabilisation with 12-24 months, while regional hotels are for the most part already back to pre-Covid levels, with the recovery in trading performance occurring faster than most anticipated.
  • There is an exceptionally strong volume of activity underway off-market with a number of trading hotels and hotel investment and development opportunities at various stages of negotiation at present, copperfastening CBRE’s belief that transactional activity in the Irish hotel market in 2022 could exceed €500 million.



  • Almost €760 million of investment trades signed in the Irish investment market in the first three months of 2022. A number of significant sales that are currently in legals will further boost investment spend when these transactions complete in Q2 and Q3. The recently announced sale of the entire Hibernia REIT portfolio to Canadian investor Brookfield will add more than €1 billion in its own right when this transaction closes later in the year while Blackstone’s acquisition of Meta’s Fibonacci Square and Salesforce’s Dockland’s tower will account for approximately another €1 billion.Both of these transactions are indicative of the strength of investor appetite for prime real estate assets in the Irish market.
  • Increased funding costs and the prospect of higher interest rates in due course will invariably influence yield movements in the medium term albeit pricing in the Irish market remains stable at this juncture, supported by strong underlying occupational fundamentals and the prospect of further rental growth in many sectors of the market.
  • ESG continues to make its presence felt, primarily in the form of an ever-widening gap between the performance of prime and secondary assets. Many secondary and provincial buildings generating low levels of rental income will face a particular challenge to absorb necessary retrofitting costs, particularly taking current build cost inflationary pressures into account.
  • CBRE expect to see strong transactional activity continuing in the investment sector over the coming months albeit an increasing proportion of investment trades are likely to occur off-market in targeted campaigns. The property consultants say they expect to see particularly strong appetite for standing stock considering the supply shortages that are inherent in many sectors.
  • CBRE say there is a need to come up with a sensible solution to facilitate long-term leasing in some form and capitalise on the strong investor demand to deploy capital into social housing delivery.



  • Q1 2021 was the strongest first quarter ever recorded in the Dublin industrial & logistics market with more than 96,500m2 of transactions signed in the three-month period and demand having risen quarter-on-quarter to more than 197,350m2. In addition to occupational activity, more than €178 million of industrial investment transactions were recorded in Q1. However, with the supply of standing stock now at an all-time-low, matching the volume of occupier and investment activity witnessed in 2021 will be difficult without some significant portfolio trades as well as pre-letting and forward-funding transactions. A large proportion of the speculatively developed units currently under construction are either in advanced negotiation or pre-let prior to practical completion such is the demand for modern stock close to the M50, with strong demand for buildings that demonstrate the highest ESG credentials.
  • Prime rents have now breached the €118 per square metre (€11 per sq. ft.) benchmark while rents for secondary buildings have also increased. The delta between quoting rents for prime new, prime second-hand and secondary industrial accommodation has been narrowing of late due to the particular shortage of accommodation in this sector but this should revert again in due course as more new stock is delivered.



  • While transactional activity in the healthcare sector in the opening months of 2022 has been more subdued than last year, there has been a consistent volume of transactions announced recently, nonetheless. Indeed, there has been more than €200 million deployed in this sector year-to-date between newly announced deals and forward fund agreements agreed in 2021.
  • Build cost inflation as well as a plethora of other rising costs that will negatively impact profit margins for nursing home operators including staffing, energy and food costs will almost certainly mean that the development of many proposed schemes, where viability was at best marginal, will now be put on hold indefinitely. A lack of new development will arguably preserve occupancy and property value for existing operators but will create significant pressures for what is already a severely undersupplied sector in the short to medium term. Those occupiers who have committed to leases with CPI-linked rental uplifts will also come under considerable pressure for the foreseeable future.



  • Rising inflation doesn’t yet appear to be having a discernible impact on the Irish retail sector with strong retail sales and footfall activity recorded in the last two-month period, boosted by a noticeable increase in office workers, tourists and students in Dublin and other cities. However, inflationary pressure has the potential to impact negatively on consumer sentiment and spending power as well as retailer margins over the coming months. Rising build cost inflation meanwhile has the potential to impact negatively on the cost of fit-out of new stores.
  • There is particular demand for prime stores on Grafton Street and in Dundrum Town Centre at present with several high-end retailers looking at entering or expanding their presence in the Irish market.



  • The low volume of land sales completed in Q1 2022 is not surprising considering the dearth of large land banks offered for sale in the opening months of the year. Many developers have understandably been holding off bringing sites to the market until such time as there is more clarity on new local authority development plans, which are currently being finalised. Uncertainty around build cost inflation has escalated in recent months and may now prove an additional impediment to sites being released for sale as developers take stock.
  • The scarcity of sites being traded means that any well-located sites with planning that are brought to the market are likely to be keenly bid. Despite underlying concerns about build cost inflation, which in Ireland’s case is further compounded by lengthy planning delays in some cases, the reality is that the Irish housing market remains significantly undersupplied and this will continue to support demand for land over the medium to long-term.

About CBRE

CBRE U.C., (CBRE Ireland) registered in Ireland, no. 316570. PSRA Licence No. 001528 is the country’s largest commercial real estate services company with offices in Dublin and Cork. Currently employing over 150 employees, we work with occupiers, investors and developers of office, industrial and logistics, retail, hotel and healthcare property, providing strategic advice and execution for property sales and leasing; tenant representation, corporate services; property and project management; appraisal and valuation; development services; investment management and debt advisory; business rates and compulsory purchase and research and consulting. Please visit our website at

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at