The Irish commercial property market will be polarised in 2013. According to the latest predictions from CBRE, the Dublin market will be vibrant and active but secondary markets will struggle in comparison.
Demand is currently quite high from international investors who are interested in acquiring prime real estate in the Irish market. While there is cause for optimism regarding the prospects of the secondary markets, it will take longer for them to decide to make purchases in outlying areas.
New properties will continue to come onto the market at various times throughout the year, but are expected to do so at a relatively slow pace. Banks are expected to continue to sell off their property holdings in 2013 to improve their bottom line. There will be more loan sales activity this year as well.
International investors will be focused on looking to buy prime retail and office properties located in the Dublin core area. Domestic investors are more likely to put their money into properties in secondary markets. Over the short term, rental rates are expected to remain relatively flat.
There is some potential for limited rental growth in the prime retail and office sectors this year. Rents are predicted to remain stable for the next 12 months.
Marie Hunt, Executive Director and Head of Research at CBRE recently forecast that 2013 will be a busy year for the Irish commercial property market. She described this period as a time when the “wreckage” will be cleared away to make room for a recovery phase. She reiterated that increased polarisation is expected to be a “key trend” this year.
