In its 2012 outlook published this morning, CBRE says it expects to see a notable increase in transaction volumes in all sectors of the market in 2012, though values will only stabilise once there is sufficient transactional evidence available to provide clarity on pricing. It also notes that debt funding is going to remain severely constrained.
The Irish Times reports that according to CBRE, rents for prime buildings will eventually stabilise in 2012 although rents for secondary properties will continue to decline as occupiers continue to take advantage of the ability to negotiate favourable terms and conditions in an oversupplied market.
The decline in capital values – a feature of the Irish market since 2008 – will come to and end over the course of 2012, according to CBRE. Although yields for prime properties are expected to strengthen as transactional evidence materialises, yields on secondary properties will continue to come under pressure as the year progresses, CBRE predicts.
The property agency also expects a pick-up in the residential property market this year, predicting an increase in the sale of residential investment portfolios over the course of the next 12 months. However, it expects an increase in “functionally obsolete accomodation” in all sectors of the market.
“Without a functioning debt market, this accommodation is set to become increasingly unfit for purpose and eventually won’t comply with health and safety and other legislative directives,” it notes.