Investment in commercial property in Ireland rose by 21% last year

Office rents are up and set to rise again in 2017...

Investment in commercial property in Ireland rose by 21% last year

Brian Lawless PA Archive/PA Images

Investment in the Irish commercial property market rose by 21% year-on-year to reach €4.46bn last year - according to a new report from Cushman & Wakefield Research and Sherry Fitzgerald.

More than 260,000 sq m of accommodation was taken up in the Dublin office market during the year - that's 16% more than 2015 - and 45% ahead of the 10-year average.

Prime rents in Dublin rose by 4.6% during 2016 to an average of €619 per sq m.

Cushman & Wakefield forecast that this average will rise to €646 per sq. m during 2017.

"Activity levels in the opening six months of the year were particularly strong, however dampening somewhat in the third quarter, leading to some fears of a Brexit impact," the report notes - adding that activity picked up again in the final quarter.

€2.26bn or 51% of total investment was in the retail market, included the sale of Blanchardstown Town Centre to Blackstone for €950m. This was the largest commercial property transaction in the history of the State.

Commenting on the year; Marian Finnegan, Chief Economist, Cushman & Wakefield said 2016 was a "significant year for the Dublin office market, both in terms of occupation levels and in terms of development.  Just over 31,000 sq. m of office accommodation was delivered in Dublin during the year, which was the first wave of office development in the city since 2011.

"Notably, there is an additional 373,000 sq. m of office space under construction in Dublin today, of which 230,000 sq. m is expected to be completed by end 2017. This is critically important to satisfy demand pressure and stabilise rental growth," she added.