There has been continued momentum in the Dublin office market in the first few months of 2016 with several new requirements emerging since Christmas and a number of sizeable transactions currently in active negotiations.
This is according to commercial property specialists, CBRE. who today released their first bi-monthly report for 2016. The report focuses on trends and transactions in each sector of the Irish commercial property market in the first two months of the year.
Prime rental values remain steady at approximately €592 per square metre (€55 per sq. ft.) at present. However, this headline rate is expected to increase to €700 per square metre (€65 per sq. ft.) during 2016 as transactions close and new market evidence materialises. Construction has commenced on more than 120,000m2 of new office accommodation in Dublin city centre since the beginning of the year.
Furthermore, there are more signs of development-related activity in all sectors of the market, most notably in the Dublin office and hotel sectors while the appetite for investment in alternative sectors such as purpose-built student housing is also becoming increasingly evident.
Activity in the hotel sector also remains strong with considerable domestic and international focus on the prestigious Gresham Hotel in Dublin city centre, which the firm recently offered for sale guiding €80 million.
Demand for prime Dublin pub properties has been particularly strong in the first two months of 2016 with very strong interest in properties offered for sale including Kennedy’s in Drumcondra, Dublin 9, which was guiding €900,000 and which has now gone to best bids. Meanwhile, the sale of the Castle Inn in Rathfarnham has completed in recent weeks for a price in the order of €660,000.
Executive Director & Head of Research at CBRE Ireland, Marie Hunt says, “The first two months of the year have been active in all sectors of the commercial property market. The EU referendum result and the implications if the UK were to leave the EU is creating uncertainty for investors, occupiers, developers and others involved in UK real estate.
“However, to date, demand for Irish commercial real estate doesn’t appear to have been affected by this particular issue. Similarly, although we expect a number of weeks of political uncertainty following last weeks General Election in Ireland, the outcome is unlikely to have a significant impact on the commercial real estate market locally.”