The Central Bank is considering new regulations to govern how the commercial property investment market is regulated here.
In a Financial Stability Note published today and based on a survey of funds last year, it said it will explore "possible macroprudential policy interventions to strengthen the property fund sector's overall resilience to potential future shocks"
The funds in question are registered in Ireland and known as "Alternative Investment Funds".
They are different to Real Estate Investment Trusts (REITs) and also differ from pension funds and life assurance companies.
There are 171 funds in the sector holding €23.3 billion in property assets, according to the Central Bank's survey.
The total value of investment in Irish commercial real estate is estimated to be €53 billion, which means the funds make up just over 40% of the market.
The two main areas the Central Bank believes may need new regulations are rules around how long an investor must hold their money in a fund and how much notice they must give if they wish to withdraw funds.
The other area is in the overall level of "leverage" or borrowed money in a fund.
The survey found that 37% of the funds' assets are in office space, 26% in retail, 15% in residential and 23% in 'other'. The investments are overwhelmingly in Dublin, with property there accounting for 87% of total investments.
The survey also finds that the top five fund managers manage 75% of all property funds.
It also finds that Irish funds hold higher levels of leverage, or borrowed money, than their European counterparts.
Today's report cites a forecast that Irish commercial real estate prices could fall by 16% over the course of 2020-22 as a result of the impact of Covid 19.
However, it also notes that so far there is "little evidence of widespread assets sales by property funds in the light of the shock."
The report says that 73% of investors in the funds are overseas but that the biggest single cohort by both country and sector are Irish pension funds at 27%.
Irish banks account for €3.2 billion or 27% of the sectors' funding.
The report notes that while this is significant, it is not at the levels which existed in the run up to the financial crash.
