Irish property market remains sound - CB Richard Ellis

CB Richard Ellis (CBRE) have issued an upbeat assessment of the Irish property market. CBRE says in its latest bi-monthly report on the country that it has not found any evidence of the economic downturn impacting on office take-up in Dublin. But it notes a greater emphasis among tenants on finding the 'optimum property'.

Some 50,000 m² of new office requirements have been activated this year. Rental growth is not foreseen for 2008 but the current levels should be maintained by the lack of new development in the sector, the report said

CBRE also refutes 'doom and gloom' predictions for the retail market, as it says strong consumer spending and reasonable development levels are helping to maintain rental levels. The industrial sector has seen a number of leases signed in 2008, particularly in small to medium-sized facilities. The investment market has seen a drop in transactions due to lack of bank funding. While the report sees some potentially strong investment opportunities coming onto the market the cost and availability of funding will remain issues.

Marie Hunt, director of research at CB Richard Ellis, who compiled the report, commented: 'Activity levels in the Irish property market have been quite encouraging during the first two months of 2008, albeit every sector of the market is performing to varying degrees. While economic and property market fundamentals are still basically sound, the big issue in most sectors is the scarcity and cost of debt-funding. Despite the fact that total returns are easing in line with yield movements and lower rental growth potential, investor appetite for property remains strong but there is no doubt but that transaction levels in all sectors would be higher if funding was more readily available.'