The Irish investment market is going through a 'very challenging period' as deals in the commercial property sector fell by almost 80% year-on-year in the first half of 2008, CB Richard Ellis said on Tuesday. In its new research report 'Irish Capital Markets Market View', the property services firm said that investment activity in the country dropped from EUR 1.9 bn in the first half of 2007 to EUR 392mln in the first half of this year.
The Irish investment market is going through a 'very challenging period' as deals in the commercial property sector fell by almost 80% year-on-year in the first half of 2008, CB Richard Ellis said on Tuesday. In its new research report 'Irish Capital Markets Market View', the property services firm said that investment activity in the country dropped from EUR 1.9 bn in the first half of 2007 to EUR 392mln in the first half of this year.
CBRE said there was 'only limited appetite for properties currently being offered for sale' and that potential buyers are having difficulty securing debt financing. Potential sellers are slow to accept the decline in values that has resulted from yields increasing quite sharply. 'A combination of all of these factors has led to investment activity coming to a virtual standstill in recent months,' it said.
The adviser noted that yields increased by at least 100 basis points in all sectors in the first six months of the year and are expected to move out by another 50 to 75 basis points by the end of 2008 in order to attract buyers. 'This could bring retail yields to 4.25 - 4.50%; prime office yields to 5.25% - 5.50% and prime industrial yields to 6.25 - 6.50%,' it added.
