CBRE predicts next wave of office development in Dublin

Tuesday 14 January 2014 10.03
CBRE says prime office rents in key Dublin areas are set to rise by 14% in 2014
CBRE says prime office rents in key Dublin areas are set to rise by 14% in 2014

Property company CBRE has predicted that this year will see the return of cranes to the Dublin skyline as the next wave of office development in the city begins. 

In its outlook for 2013, CBRE forecasts that prime office rents in the key Dublin 2 and 4 areas will increase by another 14% to reach about €435 per square metre by the end of the year.

They had grown by over 25% last year.

CBRE also predicts that the year will see developments in the number of office refurbishment and retrofitting projects, while stronger volumes of activity are expected in the Irish retail property market over the next 12 months.

It also predicts that some rental growth will be evident in the retail market for the first time in over six years, although this is expected to be limited to certain main streets and shopping centres for the foreseeable future.

CBRE also notes that after the setting up for two Irish REITs last year, other such companies are set to emerge in 2014, although it notes that the Irish market is too small to sustain a large number of REITs.

On the housing market, the property company says that this year will see a "notable" increase in the volume of house building in the Dublin market. It said that this in turn will boost demand for small residential zoned sites, especially those with planning for between 50 and 100 housing units.

Outside of Dublin, CBRE said that a significant amount of land will be traded this year, although buyers are likely to comprise mainly local buyers. "Only lands that are appropriately priced will attract buyers, however, with little or no premium payable for the benefit of zoning or planning permission," the company added.

"Although there are several legacy issues still to be tackled and our economy remains susceptible to macroeconomic developments, 2014 is shaping up to be an even busier year for the Irish commercial property market than last year," commented CBRE Ireland's managing director Enda Luddy.

He said this would be fuelled to a large extent by improving domestic economic indicators and by some improvement in the availability of debt funding.