The biggest frustration for many occupiers at present is the inflexibility of lease terms being offered by landlords in the current market, according to commercial property specialists CBRE.
With the development of several new office schemes now well underway and a number of refurbishment opportunities becoming available, CBRE says there is finally some light at the end of the tunnel for occupiers seeking office premises in the capital.
Prime rental values remain steady at approximately €592 per square metre (€55 per sq. ft.) at present. CBRE expects this headline rate is expected to increase to €700 per square metre (€65 per sq. ft.) during 2016 as transactions close and new market evidence materialises.
Construction has commenced on more than 120,000m2 of new office accommodation in Dublin city centre since the beginning of the year.
CBRE say that shortages of prime accommodation continue to frustrate in the occupier sectors of the commercial property market, most recently in the prime retail and industrial sectors.
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CBRE are seeing more signs of development-related activity in all sectors of the market, most notably in the Dublin office and hotel sectors while the appetite for investment in alternative sectors such as purpose-built student housing is also becoming increasingly evident. Activity in the hotel sector also remains strong, with considerable domestic and international focus on the prestigious Gresham Hotel in Dublin city centre, which the firm recently offered for sale guiding €80 million.
Retail
Activity has remained consistently strong in the retail property market in Ireland during the first two months of 2016, according to CBRE. Demand for prime pitches throughout the country is strong although a lack of premises is proving to be a challenge, as any of the better high streets, shopping centres and retail schemes are now at, or close to, full occupancy.
The strength of demand from existing retailers and new entrants is fuelling rental growth and leading to the exchange of key money in certain locations.
“The strength of retailer appetite and potential for rental growth in this sector will no doubt be encouraging to the many investors who will be bidding on Blanchardstown Town Centre in west Dublin, which has recently been offered for sale,” said CBRE director Marie Hunt.
