The star performer in the commercial property market in 2019 was the prime industrial sector, with rents up 29% during the year in Dublin on the back of demand for high-spec new units from logistic, tech and data companies.

That’s the headline takeaway from the Commercial Property Review and Outlook for 2020 from the Society of Chartered Surveyors Ireland.

The 29% jump in industrial sector rents brought the rate to an average of €114 psm, while prime office rents in Dublin rose to €675 psm, an 11% increase year on year. Office rents in Cork rose by 12% to €250 psm.

Nationally, industrial rents are expected to rise by about 4% this year, with half of surveyors saying the supply of large units will be less than demand.

Prime retail rents were down 9% in Dublin and 7% in the rest of the country, while Grafton Street rents are over ten times higher than neighbourhood shopping centres in Dublin.

In Association with

SCSI president Johanna Gill (pictured) said: “It’s clear from our report that there are micro-markets emerging across the commercial sector: the urban-based market engaging multinational businesses affected by international factors such as Brexit, and a regional market, driven by domestic demand.

“While major office and hotel accommodation reached completion in Dublin, there was a sense in 2019 that much of the market activity was tenants moving around, with few new tenants coming into the country. The sense of our members is that there will be no major influx of companies to Ireland when Brexit is fully completed. The sense is that movement has already happened.

Provincial Overhang

“Our members are seeing little new development activity in provincial towns, as the overhang of property commenced during the Celtic Tiger era reaches financial viability and is completed. This has long been a concern for the society, and we would like to see much more being done by government to encourage small and medium sized businesses to locate in provincial towns.”

Retail continues to face the challenge of online competition, and the SCSI says that the decline of 9% in Dublin and 7% in the rest of the country exemplifies the problem, with smaller towns facing particular challenges.

Gill added: “Several surveyors noted that these towns are often by-passed, as people head to the cities to do a bigger shop. Some of them are trying to support a high street and an out of town shopping centre, but it’s very difficult to maintain activity in both.”

The survey shows that the private rental market, including build-to-rent and shared housing models, continues to perform very strongly, said Gill, with an ever-larger cohort of tenants and an increased supply of purpose-built property to rent.

“The movement towards the development of large-scale portfolios is likely to continue as demand for high quality rental properties in urban areas expands,” she added.

The full report is available here.