Irish commercial real estate is having a ”phenomenal year”, according to CBRE.

Research by the advisory firm’s Dublin office found that the volume of transactional activity in “almost every sector of the market” is exceeding expectations.

The country, it said, is now enjoying a solid recovery in property values, fuelling rental growth.

CBRE said asset sales could total €4bn by the end of this year, with transactional activity in the third quarter the highest on record in the Irish market.

“Strong volumes of activity continue to be recorded in all sectors of the occupier markets, which, in turn, is fuelling rental growth,” CBRE said.

“The next two months are set to be very busy both in terms of getting transactions finalised and launching new assets for sale.”

The office sector, where prime Dublin rents have increased by more than 28% since the beginning of the year, has seen the most activity.

Around 130,000sqm of office space in the Irish capital was let in the first nine months, putting the sector on target to beat its annual average volume of 160,000sqm of leasing activity.

“We are now beginning to see rents in the retail and industrial sectors of the market starting to show signs of growth,” CBRE added.

“There has also been a very strong increase in transaction volumes in the hotel and licensed sector over recent months.”

Demand for well-located sites remains strong, CBRE said.

Developers, however, are “frustrated by the uncertainty” caused by proposed central bank rules on mortgages.

A record total return of 11% from Irish commercial property was achieved during the third quarter, according to the IPD Irish Index.

Almost €3bn of asset sales over €1m in value were completed in the first nine months of this year, alongside €17bn of Irish loan sales.

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