The Irish property investment market is set to record over €3bn of transactions in 2025, according to commercial property specialists CBRE.
Its latest report ‘Outlook 2025’ makes a number of predictions for each sector of the Irish property market in the year ahead.
Last year, the market recorded over €2.4 billion of transactions, and CBRE expects to see a continued increase in investment activity this year.
“The Irish market has only seen the very start of the recovery in the investment market,” the report states.
“Despite stubborn inflation and a selloff in the bond markets early this year, CBRE expects the ECB to cut interest rates further in 2025, which will further stimulate investment activity,” it adds.
CBRE expects the office sector to see an uptick in investment activity this year.
In terms of office leasing, the report states that the vacancy rate will start to decline this year, as office construction slows.
When it comes to residential investment, the report states that the rental cap regulations currently in place have contributed to a “significant” slowdown in residential investment over the last two years.
In 2024, investment volumes in the sector totalled €466m.
“A review of the current rent regulations in Ireland would assist a rebound of investment in the sector, which is vital to meet the government’s housing target of 50,500 new units per annum,” the report states.
According to CBRE, the Planning and Development Act 2024 will bring much-needed reform to the Irish planning process.
“Although the Act has its critics, overall, it should enhance and support the development of housing in Ireland this year and beyond,” the report states.
Meanwhile, nearly €900m worth of Irish hotel transactions completed last year – making it the strongest year for the market since 2006.
CBRE is predicting a similar level of transactional volumes this year.
“Developers and investors are beginning to recognise the gap in the Irish market for purpose-built tourist hostels,” the report states.
“The sale of Jacobs Hostel in Dublin 1 to Azora Group for a price reported to be over €45m completed this year while ‘Clink’, a 600-bed hostel opened on Abbey Street,” it added.
In terms of retail, the report states that leasing momentum across both the high street and shopping centres was ‘healthy’ in 2024.
Brands such as Alo Yoga, Kiko and New Balance all entered the Irish market.
However, rising operational costs weighed on the Food & Beverage sector last year, and resulted in a spate of restaurant closures throughout the country.
But CBRE expects the reinstatement of the 9% VAT rate for non-accommodation-based hospitality to offer some respite.
The industrial and logistics sector saw take up fall 50% in 2024 when compared to the previous year – the lowest level since 2011.
CBRE attributes this drop to the global uncertainty weighing on the sector.
Article Source – Irish investment market to top €3bn in 2025, CBRE predicts – RTE
