IRELAND - Ireland's real estate market is expected to be challenging but offers investors attractive opportunities in 2009, according to DTZ's 2008 review of Irish Commercial Market Review and Outlook for 2009.
The Irish government's decision to reduce stamp duty on commercial property from 9% to 6% and the European Central Bank's decision to cut interest rates by 1.75%, along with higher yields and an easing of liquidity, are expected to stimulate activity and help revive Ireland's property market, claims DTZ.
Its report predicts the market will have almost corrected itself in 2009 and will offer good investment deals on the way down, as vendors will continue to lower their prices.
The volatile Irish economy and fears of increased unemployment are, however, set to reduce occupier demand in Dublin's office and industrial sectors.
Development in Dublin's office market is likely to drop in 2009 as a result of tighter credit funding and fewer relocating office occupiers, which the report says is needed to bring the market back into equilibrium given the over supply of space.
Supply levels reached a record high at the end of 2008, with 470,600sq m of available space - a 10% increase on the previous quarter.
The Dublin industrial market is also expected to see further contractions, following a slowdown in transactions the year before when development activity weakened and vacancy rates rose to 15.1% in December 2008.
The retail market is predicted to struggle in the short- to medium-term, with rent levels likely to increase and speculative development activity continuing to drop.
DTZ warned the development land market would stay subdued in the early part of this year and could experience an increase in forced sales if the economy worsens. In the last year, the Dublin development land market has dropped 20-30% in value.
The firm also announced last week it has appointed Serkan Bektas as global head of capital markets following plans unveiled last month to reshape the executive management team.
Bektas, previously managing director at UK solutions and structured product sales of Barclays Capital, will join the company in the second quarter of 2009.
DTZ also confirmed it had obtained clearances from the competition authorities in France and Germany for the Firm Placing and the Placing and Open Offer, aimed to help DTZ raise up to £55m (€61.6m) of equity through shares to weather the financial crisis and avoid going into administration. (See earlier IPE Real Estate story: DTZ goes for share-raising or bust)
The firm has so far received subscriptions for new shares worth £48m and dealings in the new ordinary shares are then expected to begin tomorrow on 20 January 2009.
DTZ Sherry FitzGerald, a division of the global real estate adviser DTZ, carried out the research for the Irish Commercial Market Review 2008/Outlook 2009.
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