The combination of a low interest rate environment and strong demand from occupiers for office space in Dublin helped Green Real Estate Investment Trust to more than double its rental profit over the past year according to Pat Gunne, chief executive of Green Property REIT Ventures.
The REIT's rental profit rose by 137% over the 12 months to the end of June to €24.8m.
"We've had very strong foreign direct investment. The IDA has played a blinder...and that has led to a shortage of space which ultimately ends up in rental growth," said Pat Gunne.
He said ultra low interest rates had been a positive for property investors. Returns from traditionally low risk assets such as sovereign debt were either near zero or even in negative territory. Mr Gunne said "the best part of the interest rate curve on the downside is behind us". "When that turns that will definitely go against us. For the time being the success of the IDA and foreign direct investment and the growth of the Irish economy in general continues to be a [fair] wind," he said.
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Property developer Owen O'Callaghan said a €90m office development in Cork City is likely to be completed within two years.
O'Callaghan Properties has been granted permission for what would be the largest office complex in the city. Mr O'Callaghan said work will commence next year and that the company hoped to have the four buildings finished by the end of 2018.
"Cork has a lot of advantages over Dublin at the moment. In particular our rental levels are less than half what they are in Dublin," he said.
"We'd hope, and we'd be pretty confident, that within a two, two and a half year timeframe we'll be able to fill this development," he said.
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MORNING BRIEFS - China will become a €1 billion export market for Irish food and drink within three years according to the chief executive of Bord Bia.
Aidan Cotter was speaking at the opening of the state board's second office in China at Shanghai.
The Irish construction sector marked three straight years of expansion in August according to the latest Ulster Bank construction purchasing managers' index.
The monthly measure of activity and sentiment shows the pace of growth slowed slightly in the month compared to July but Ulster Bank chief economist Simon Barry said it still remains "comfortably in expansion territory".
Commercial activity remains the fastest growing sub-sector but housing activity also expanded strongly during the month.
