Report
Ireland Real Estate Market Outlook 2025
January 23, 2025 12 Minute Read
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Introduction
Despite global economic uncertainties and geopolitical instability, Ireland’s domestic economy will continue to grow in 2025, given its healthy financial profile, robust employment levels and continued real wage growth.
A reliance on corporation tax receipts and foreign direct investment from the U.S. will continue to come under the spotlight however, particularly under the protectionist policies of the Trump administration.
In contrast to global trends, Ireland has re-elected a broadly centrist government, which will seek to address key issues influencing real estate, from rent regulation to taxation and planning. This will provide more opportunities for investors and developers, particularly in the residential sector this year.
European real estate valuations have largely stabilised in response to the ECB’s recent more accommodative monetary policy, and despite some stubborn inflation in the Euro area and a selloff in the bond markets in early 2025, base interest rates will continue to tick down over the next 12 months, but perhaps more slowly than anticipated. This will be supportive of transactional activity and development across sectors.
Irish investment spend was 40% below the long-term average in 2024 but will improve in 2025. The sale of the Blanchardstown Shopping Centre and One & Two North Dock has shown that institutional capital will be active where pricing is attractive, and some new capital is already emerging this year with a focus on residential assets.
Economic Outlook
Ireland’s two traditionally dominant centrist parties, Fianna Fáil and Fine Gael, captured 86 of 174 Dáil seats in the November 2024 Irish general election. Both parties, along with a selection of independents, have formed a coalition and are entering government in January. The confirmation of a centrist government for a new five-year term will be positive for real estate activity across sectors, particularly as it provides at least some certainty and continuity around regulation and policy.
Capital Markets
ECB base rates will continue to tick down in 2025 and debt availability will improve as more lenders move away from a risk-off approach to real estate. Liquidity events and the end of fund life will also contribute to a generally more liquid trading environment in the year ahead.
Living
The rent regulations currently in place in the Irish market have contributed to a significant slowdown in residential investment over the last two years. ‘Rent Pressure Zone’ legislation will expire in December 2025, and over the course of this year this regulation will garner a greater focus from policymakers.
Offices
Bifurcation remains a key theme in Dublin offices. The availability of sustainable space in the core city centre will continue to shrink this year, while more decisions will be made in relation to non-sustainable buildings (i.e. to sell, refurbish or repurpose).
Industrial & Logistics
The Irish industrial & logistics sector was exposed to global economic uncertainty in 2024. Entering 2025, there are several mid-to-large scale requirements for space in Dublin that should lead to a rebound in activity, but the prospect of U.S. tariffs on global trade is a concern for the sector.
Retail
Experiential retail & leisure is a growing trend in the Dublin market. 2024 saw the arrival of two new experiential retail offerings: Pitch and Supersocial. Barry’s, Flight Club, Bounce, and Lane7 are scheduled to open in 2025. Additionally, notable brands such as Everyman Cinema and Hijingo currently have requirements for space.
Sustainability
The next phase of the Corporate Sustainability Reporting Directive (CSRD) will come into effect in 2025 for companies not currently subject to the NFRD who meet two or more of the following criteria: have >250 employees, >€40m in turnover, or >€20m in total assets. Companies in scope for the CSRD must also report on their EU Taxonomy alignment.
Hotels
Despite some challenges to trading performance, the hotel sector was active from a deals perspective in 2024 and transactional activity will be strong again in 2025. However, there will be continued challenges to room rates, with a substantial amount of new bed stock set to open in Dublin in 2025.
Healthcare
Cork
Demand for modern warehousing and distribution facilities in Cork has increased significantly over the past four years and the expansion of the Port of Cork will accelerate this further. The second phase of Blarney Business Park commenced construction in December while construction is ongoing at Evergreen Business Park in Little Island.
